Most Asia markets down on US rate talk


Hong Kong (AFP)

Most Asian markets fell on Monday following healthy gains at the end of last week, with investors betting the Federal Reserve will hike interest rates before the end of the year.

Shares soared Friday after data showed a first rise in Chinese factory prices for more than four years, fuelling hopes the world's number two economy is reaching the end of a years-long growth slowdown.

Analysts said comments from Fed boss Janet Yellen Friday suggested the US central bank will lift borrowing costs but at a steady pace.

Yellen said there were plausible ways that running a "high-pressure economy" could help it overcome the damage caused by the global financial crisis.

"If nothing else, this is another lower-for-longer prescription. However, these comments do not preclude a 25-basis-point rate hike this year as another step in the normalization process,” Thomas Simons, senior economist at Jefferies LLC in New York, wrote in a note to clients.

Most experts predict a hike by December at the latest and are keeping a close eye on the release this week of US industrial output and inflation data.

The prospect of higher borrowing costs weighed on Asian markets.

Hong Kong fell one percent and Sydney was 0.5 percent lower, while Seoul shed 0.2 percent, Singapore slipped 0.7 percent and Wellington sank 1.1 percent. But Tokyo was 0.2 percent up by the break and Shanghai added 0.1 percent.

Market-watchers are keeping a close eye on Bangkok's market, which soared Friday as news of the death of Thailand's king fuelled bargain-buying after heavy selling in his final days.

The dollar strengthened Friday on the prospects of higher rates and maintained its gains in early Asian trade.

The greenback bought 104.18 yen in Tokyo, from 104.16 yen in New York and well up from the 103.66 yen Thursday. The euro and pound also retreated.

In Sydney, Crown Resorts plunged more than 10 percent on news that 18 sales and marketing staff had been held in China, including an executive in charge of luring high-rollers to Australia.

- Key figures at 0230 GMT -

Tokyo - Nikkei 225: UP 0.2 percent at 16,880.98 (break)

Hong Kong - Hang Seng: DOWN 1.0 percent at 23,012.86

Shanghai - Composite: UP 0.1 percent at 3,065.31

Euro/dollar: DOWN at $1.0971 from $1.0974 Friday

Dollar/yen: UP at 104.18 yen from 104.16 yen

Pound/dollar: DOWN at $1.2159 from $1.2193

Euro/pound: UP at 90.23 pence from 90.01 pence

Oil - West Texas Intermediate: DOWN 22 cents at $50.13 a barrel

Oil - Brent North Sea: DOWN 14 cents at $51.81 a barrel

New York - DOW: UP 0.2 percent at 18,138.38 (close)

London - FTSE 100: UP 0.5 percent at 7,013.55 (close)