Asian stocks fell Monday as investors lowered their expectations of a sharp interest rate cut by the Federal Reserve. Tensions in the Middle East rose after Iran seized British tankers, boosting crude oil prices.
The MSCI Mingsheng Asia-Pacific (excluding Japan) index fell 0.4%.
The Nikkei index. N225 fell 0.3 percent as views on the Fed's easing policy cooled and domestic companies remained cautious before the start of the earnings season this week.
China's Shanghai Composite Index. SSEC fell 1.1%, but all eyes are focused on the new technology GEM. The first batch of new shares in KSCM had a turbulent opening, most of which rose sharply, and many new shares triggered temporary suspension in early trading.
Hong Kong's Hang Seng Index. HSI fell 0.9%. The Korea Composite Stock Index. KS11 fell 0.1%.
Global stock markets rallied late last week after pigeonholed comments by New York Federal Reserve Bank President Williams reinforced the Fed's expectation of a 50-point cut in interest rates at its July 30-31 meeting.
But the stock market withdrew those gains on Friday and the U.S. stock market fell as the New York Federal Reserve said Williams'speech had nothing to do with possible policy actions at the Federal Reserve's forthcoming policy meeting.
Expectations of a sharp interest rate cut have cooled further after a report in the Wall Street Journal. Given global growth and trade uncertainty, the Fed may cut interest rates by 25 basis points this month and then further in the future, the report said.
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