Asian stocks dropped, with the regional benchmark paring its biggest monthly gain since September 2013, as the Federal Reserve downplayed weak U.S. economic growth and kept raising interest rates on the table for later this year.
The MSCI Asia Pacific Index fell 0.5 percent to 155.69 as of 9:01 a.m. in Tokyo, heading for a 6.4 percent advance this month. The Standard & Poor’s 500 Index slipped 0.4 percent on Wednesday after data showed the U.S. economy grew just 0.2 percent in the first quarter, with Fed Chair Janet Yellen attributing part of the slowdown to “transitory factors.” E-mini futures on the S&P 500 Index fell 0.1 percent.
“The jury is still out on whether the weakness points to a more structural slowdown in the economy,” Mark Lister, head of private wealth research at Craigs Investment Partners Ltd., which manages about $7.2 billion, said by phone from Wellington. “While plenty of people are expecting the rate hike to be pushed back even to 2016, its important to watch the next piece of economic news to gauge whether the weakness we’ve seen was a one off or the beginning of a trend.”