Fears over early end to Fed stimulus hit Asian equities

Investors react in front of an electronic board showing stock information at a brokerage house in Fuyang, Anhui province, in China yesterday. China’s main stock indexes closed down yesterday. The CSI300 index, which tracks the largest firms listed in Shanghai and Shenzhen, shed 3.4% to close at 2,610.5 and the Shanghai Composite Index closed at 2,325.95 points, down 2.97%, dragged by finance and insurance shares.

AFP/TokyoAsian markets suffered a heavy sell-off yesterday, following a tumble on Wall Street as traders grow concerned that the US Federal Reserve could bring an early end to its huge stimulus programme. Minutes from the Fed’s most recent policy board meeting showed some members were in favour of cutting short the $85bn-a-month bond-buying introduced last year to support the economy and which has helped lift global shares. Tokyo fell 1.39%, or 159.15 points, to 11,309.13 and Sydney slid 2.33%, or 118.6 points, to 4,980.1, its worst day so far for 2013 and biggest fall since May. Seoul was off 0.47%, or 9.42 points, at 2,015.22. Shanghai tumbled 2.97%, or 71.23 points, to 2,325.95, while Hong Kong slipped 1.72%, or 400.74 points, to 22,906.67. The Fed introduced a third round of its asset-purchase scheme in September and said it would not take its foot off the pedal until unemployment had fallen and the economy was strong enough. However, investor sentiment took a hit after the Fed minutes showed a “number” of board members said an ongoing evaluation of the easing “might well lead the committee to taper or end its purchases before it judged that a substantial improvement in the outlook for the labour market had occurred”. In Tokyo yesterday, the euro bought $1.3265. The euro also sat at ¥123.96 compared with ¥124.37 in New York. The greenback fetched ¥93.45, against ¥93.61. Flagship airline Qantas lifted 2.79% after slashing international losses and banking Dreamliner compensation from Boeing to notch a net first-half profit of $114mn - up 164% year on year. Sony slipped 1.77% to close at 1,331 yen in a muted response after it announced its long-awaited PlayStation 4 in New York without actually unveiling the console. Oil prices were lower owing to a stronger dollar, with New York’s main contract, light sweet crude for delivery in April, shedding $1.06 to $94.16 a barrel and Brent North Sea crude for delivery in April dropping 98¢ to $114.62. Gold was at $1,568.41 at 1030 GMT, compared with $1,595.20 late Wednesday. In other markets, Taipei fell 71.64 points; Manila closed 0.28% higher, adding 18.84 points to 6,667.41; Wellington fell 1.04%, or 43.81 points, to 4,170.43; Singapore closed 0.64%, or 21.29 points, lower at 3,287.60; Jakarta ended down 2.05 points, or 0.04%, at 4,632.40; Bangkok lost 1.16% or 17.90 points to 1,528.74; and Kuala Lumpur gained 0.72 points or 0.04%, to close at 1,614.05.