Wednesday Morning Briefing: Asian Shares Drop; Oil Below $53
Asian shares opened lower after U.S. stocks posted the third decline in four days, as investors braced for a Federal Reserve rate hike next week.
Japan's Nikkei 225 Share Average fell as much as 0.48 percent even after country's economy expanded for four consecutive quarters, as data showed growth has been modest and driven mostly by exports. SGX Nifty futures indicate that the Indian benchmark index will extend Tuesday's losses.
Fed Hike All But Certain
The global equities rally, sparked by Donald Trump's election victory, faded after Federal Reserve Chair Janet Yellen hinted at more aggressive rate hike path after leaving little doubt that the central bank will raise interest rates at the March 14-15 policy meeting.
The odds for a rate hike at the March meeting remained at 96 percent, according to futures rates tracked by Bloomberg.
The S&P 500 Index lost 0.3 percent, the first back-to-back declines since January, while the Dow Jones Industrial Average fell 0.14 percent to end at 20,924.76.
Healthcare stocks fell 0.5 percent after Trump in a tweet said he's working on a “new system where there will be competition in the drug industry.”
Also Read: Morgan Stanley Is Begging the Fed to Let Go of the Market's Hand
Oil Drops
Oil prices fell below $53 a barrel after U.S. industry data showed rising crude stockpiles, raising renewed concerns of a global supply glut.
Crude stockpiles rose by 11.6 million barrels last week, the American Petroleum Institute was said to report.
Brent crude for May settlement fell 0.3 cents to $55.60 per barrel on the London-based ICE Futures Europe exchange while West Texas Intermediate for April delivery declined 34 cents at $52.82 a barrel on the New York Mercantile Exchange.
Gold snapped its two-day losing streak to trade around the $1,218 per ounce mark.
Weak Start?
SGX Nifty futures fell 0.24 percent to 8,961.5 as of 7:05 a.m., after the benchmark index declined on Tuesday ahead of the crucial state election results on March 11.
Shares of Wockhardt Ltd. will be in focus today. The drug maker said Ireland's health regulator inspected the company's Aurangabad facility and recommended renewal of the certificate for the manufacturing unit. Meanwhile, the U.S. Food and Drug Administration released the warning letter issued to Wockhardt's Morton Grove facility on March 1.
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