Asian stock markets sink after Wall Street decline

AP News
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Posted: Sep 09, 2014 11:25 PM
Asian stock markets sink after Wall Street decline

BEIJING (AP) — Asian stock markets sank Wednesday following Wall Street's decline and weak Japanese machinery orders while investors mulled the timing of a possible U.S. interest rate hike.

KEEPING SCORE: Tokyo's Nikkei 225 shed 0.4 percent to 15,686.43 and China's Shanghai Composite Index declined 0.6 percent to 2,312.69. Hong Kong's Hang Seng dived 1.3 percent to 24,874.52. Sydney, Singapore and Taipei also declined.

WALL STREET: Stocks fell for a second day after Apple Inc. unveiled a new iPhone, Home Depot Inc. announced hackers broke into its online payment system and Annie's Inc., a maker of natural and organic foods, agreed to be acquired by consumer food giant General Mills Inc. The Dow Jones industrial average fell 0.6 percent while the Standard & Poor's 500 lost 0.7 percent and Nasdaq dropped 0.9 percent.

JAPANESE MACHINERY: Machinery orders, excluding shipbuilding and electricity, rose 3.5 percent in July, which analysts said showed weak demand for capital goods. Marcel Thieliant at Capital Economics said the level of orders indicates business investment shrank again in the current quarter.

THE FED: Investors are looking more closely at the U.S. Federal Reserve and whether it might raise its benchmark interest rate sooner than expected. In a paper this week, two San Francisco Fed economists said the public appears to expect a "more accommodative policy" than Fed board members. With the Fed's Open Market Committee due to meet next week, Mizuho Bank warned "markets may be overlooking the risks that the Fed raises its key rate earlier" than currently expected.

THE QUOTE: With deflation fears easing in Europe and geopolitical risks ebbing after Ukraine and Russia negotiated a truce, "the market is likely to intensify speculation on eventual Fed rate hikes," said DBS Group in a report.

ENERGY: Benchmark U.S. crude was up 21 cents to $92.96 in electronic trading on the New York Mercantile Exchange amid expectations of ample supplies and weak demand that have pushed prices down in recent days. Concern about a possible disruption in Russian supplies due to conflict in Ukraine have faded. The contract gained 9 cents the previous session to close at $92.75.

CURRENCIES: The dollar rose to 106.27 yen from the previous day's 106.17. The euro dropped to $1.2933 from $1.2942.