Asian markets saw early losses Thursday following a tumble on Wall Street as traders grow concerned that the US Federal Reserve could bring an early end to its huge stimulus programme.
Minutes from the Fed’s most recent policy board meeting showed some members were in favour of cutting short the USUS$85 billion-a-month (HKUS$659 billion) bond-buying introduced last year to support the economy and which has helped lift global shares.
Tokyo fell 0.80 per cent by the break, Sydney lost 1.19 per cent, Seoul was off 0.33 per cent, Hong Kong slipped 1.33 per cent and Shanghai was 1.39 per cent lower. Investor sentiment in the China market was also dampened after China’s cabinet said late Wednesday that it would continue to strictly implement property control measures and expand property taxes to keep home prices in check, state media reported.
The Fed introduced a third round of its asset-purchase scheme, known as quantitative easing 3 (QE3), in September and said it would not take its foot off the pedal until unemployment had fallen and the economy was strong enough.
However, investor sentiment took a hit after the Fed minutes showed a “number” of board members said an ongoing evaluation of the easing “might well lead the committee to taper or end its purchases before it judged that a substantial improvement in the outlook for the labour market had occurred”.
On Wall Street the Dow fell 0.77 per cent and the S&P 500 lost 1.24 per cent, with both markets having closed at more than five-year highs on Tuesday. The Nasdaq dropped 1.53 per cent.