Investors in Asia continue to be cautious amidst declining oil prices and the looming federal rate hikes.
Asian Investors Jittery As US Rate Hikes Loom Large
It is widely expected that the US central bank will raise interest rates for the first time in slightly less than a decade.
Meanwhile, oil prices are on a downward spiral. On Monday, Brent crude fell to $36.33 a barrel before jumping back to $37.61.
The Nikkei 225 in Japan closed at 317.52 points lower, an equivalent of 1.7% at 18,565.90 following a 3% fall on Monday.
In Australia, the S&P/ASX 200 closed the day at 4,909.6, an equivalent of 0.4%, the lowest the index has fallen since 2013. This decline can be attributed to the fall in some of Australia’s large banks, including the Commonwealth Bank whose shares fell by 0.7% and the ANZ, which closed the day at 1.3%.
An oversupply of oil in the global market has also been a cause of concern. According to Evan Lucas of IG Markets, investors are closely watching the supply side of the oil market.
Both Iran and Saudi Arabia have affirmed their commitment to continue to increase crude oil production.
Elsewhere, the Kospi index in South Korea closed at a 1,932.97, a high of 0.27% while the Hang Seng index in Hong Kong, closed at a low of 0.2% at 21,274.37. The Shanghai Composite ended the day at 3,510.35, 0.3% lower.
Fosun International, listed on Hong Kong’s Hang Seng saw its shares slide down by 3.5%, after a 10% decline at the start of the week.
This past week, Fosun’s chairperson Guo Guangchang was held by the Chinese authorities in a bid to help police with investigations.
Following predictions by the think tank, the Chinese Academy of Social Sciences that the Chinese economy would grow between 6.6 % and 6.8% in 2016, investors have remained cautious.