YEREVAN, August 20. /ARKA/. Asian stocks tumbled Tuesday as spreading worries that a reduction in the Federal Reserve’s bond purchases would hurt demand for emerging market assets slammed equities in both the region’s emerging and developed nations.
Several regional currencies were also weighed amid worries foreign investors were withdrawing funds from the region, with the Indian rupee falling to a fresh record low against the U.S. currency.
The sharp declines came amid rising yields on U.S. Treasurys and as investors looked ahead to the minutes of the Federal Open Market Committee’s last policy meeting, due Wednesday, for clues on the outlook of individual members of the central bank’s rate-setting board.
“Emerging markets are continuing to suffer from weaker sentiment in developed markets as investors are fearful that FOMC minutes later this week and the Jackson Hole meeting might result in Fed policy changes that will divert capital away from the emerging world,” said Dariusz Kowalczyk, a senior economist at Credit Agricole.
Japan’s Nikkei Stock Average JP:NIK -2.63% ended the day 2.6% lower, South Korea’s Kospi KR:SEU -1.55% lost 1.6% and Australia’s S&P/ASX 200 AU:XJO -0.67% gave up 0.7%.
Elsewhere, Hong Kong’s Hang Seng Index HK:HSI -2.20% shed 2.2% and China’s Shanghai Composite CN:SHCOMP -0.62% declined 0.6%.
In afternoon trading, Indonesia’s JSX ID:JAKIDX -5.58% slumped 5.6% to enter a so-called bear-market territory, having lost more than 20% from its 52-week high on May 21. The index had also plunged 5.6% on Monday.
Thailand’s SET TH:SET -3.27% skidded 3%, while India’s S&P BSE Sensex IN:1 -0.45% traded 0.8% lower. –0–
