Asian stocks drop as Fed speak rattles sentiment

Stock markets across nosedived as hawkish comments from Fed officials forced investors to consider a possibility of rate hike this year.

Scorecard - Japan’s Nikkei index dropped more than 1%. Strong Yen in early Asia added to the weakness in the Japanese stocks. Australia’s S&P/ASX200 dropped nearly 2%, while stocks in New Zealand fell 2.3%.

Asian equities took cues from sharp losses on the Wall Street on Friday. Investors sold equities, while dollar rose on Friday after Fed’s Rosengren backed rate hike. Fed officials have been steadily forcing markets to consider a possibility of rate hike this year. However, the big blow came from Rosengren (dovish) comments.

The focus today is on Fed’s Brainard speech. This is the last Fed speech before next week’s FOMC rate decision. Markets fear that Brainard, a dove, is likely to shock markets with a hawkish take on interest rates.