Asian stocks dropped, following a decline in U.S. equities, after better-than-estimated economic data bolstered the case for higher interest rates in the world’s largest economy.
The MSCI Asia Pacific Index lost 0.3 percent to 152.77 as of 9:01 a.m. in Tokyo. The Standard & Poor’s 500 Index sank 1 percent on Tuesday, its biggest slide since May 5, as strong readings for U.S. capital-goods orders and new home sales fueled bets for higher rates. Japan’s Topix index slipped 0.3 percent today even after the yen weakened 1.3 percent to an almost eight-year low against the dollar Tuesday. In Europe, talks between Greece and its creditors are said to be stalling.
“There is no doubt that with Greece on the verge of default, with political problems in other periphery countries, heightened valuations in all asset classes and constant global growth downgrades, investors have become increasingly short-term focused,” said Matthew Sherwood, Sydney-based head of investment strategy at Perpetual Ltd., which manages about $21 billion. “That is understandable and the limit of their vision appears to be the first Fed rate hike within the next six months.”