USA stock futures were higher Monday, after the Federal Reserve’s decision not to hike interest rates raised new concerns about global growth.
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St. Louis Fed President James Bullard said early Monday on CNBC that a rate hike is still possible in October and “there is a powerful case to be made that it’s time to normalize interest rates”. He noted that it is not just the USA central bank, but that the mantle of the global central bank is wearing.
“It’s going to be a really tough week because we have the combination of [uncertainty] over what the People’s Bank of China (PBOC) and the Fed wants”.
Both the Shanghai Composite index and the CSI300 were little changed.
MSCI’s EM benchmark index dropped 1.5 percent while Malaysia’s ringgit hit the skids again after the Wall Street Journal reported the U.S. Federal Bureau of Investigation was looking into money-laundering at troubled Malaysian state fund 1MDB.
While Asian markets ended broadly higher Friday in response to the Fed’s rate decision, having feared a rise would draw investment from emerging economies for higher returns in the United States. The Nasdaq Composite eked out marginal gains, weighed by a plunge in biotechnology plays on the back of renewed controversy over large price increases on some drugs.
The re-election of Alexis Tsipras as Greek prime minister is expected to reassure financial markets, as well as officials in Europe, that Greece will stick to its bailout commitments and enter a period of greater political calm.
US stock futures (ESc1) slipped 0.4 percent during the Asian day, suggesting further weakness on Wall Street after major indexes fell more than 1.3 percent on Friday on worries that slower overseas demand will hurt corporate profits. [.N].
According to Citi Research, Singapore’s industrial production in August is likely to have fallen 6.4 per cent from a year ago, compared with a drop of 4.1 per cent in July. Moreover, it doesn’t remove any risk from the markets.
Shares in Australia now trade near their lowest levels since 2013 after a selloff in China dragged down Asia-Pacific markets last month.
Australia’s S&P ASX 200 (.AXJO) index finished at its lowest level in almost a week as the possibility of a slowdown in global growth ignited “risk-off” sentiment.
Shares of energy producers turned mixed as oil prices edged up in early Asian trade.
Oil and metals markets also rebounded from falls at the end of last week, although emerging market stocks and currencies continued to struggle amid global growth worries caused by last week’s latest postponement in a long-awaited USA rate hike.
However, investors sold off RSA after a bid for the insurer by rival Zurich has been taken off the table.
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Japanese markets were spared losses, with three-consecutive bank holidays taking place from Monday through Wednesday.
