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Asian stocks fall after South Korean rate hike

Asian stocks fall after South Korean rate hike
AP
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First Published: Tue, Nov 16 2010. 10 52 AM IST
Updated: Tue, Nov 16 2010. 10 52 AM IST
Tokyo: Asian stocks were mostly lower Tuesday as an interest rate hike in South Korea added to speculation China will also tighten monetary policy to cool inflation.
South Korea’s Kospi fell 0.7% to 1,900.71 after the Bank of Korea raised its key interest rate for the second time in four months to 2.5% from 2.25%. The decision comes as the country grapples with concerns about inflation as well as broader worries about a slowing global economy.
There are also expectations China will soon raise interest rates again to cool growth after inflation hit a 25-month high in October. Any slowdown in the Chinese economy, the world’s second-largest and fastest growing, would likely reduce its demand for oil, metals, grains and other imports and be felt around the world.
China’s Shanghai Composite Index slid 1.3% to 2,974.51. Japan’s Nikkei 225 stock average was off 0.2% at 9,805.52 and Australia’s S&P/ASX 200 dropped 0.3% to 4,674.70.
Markets in Singapore and New Zealand were also lower while benchmarks in Taiwan and Malaysia gained.
New York stocks had a mixed finish Monday as the dollar posted its second day of gains over concerns that Europe is on the edge of another bailout.
Investors believe that Ireland may seek help from its fellow members in the European Union as its economy sputters. The dollar also spiked in May when Europe bailed out Greece.
The Dow Jones industrial average rose 9.39, or 0.1%, to close at 11,201.97. The broader Standard & Poor’s 500 index fell 1.46, or 0.1%, to 1,197.75, while the technology-focused Nasdaq composite index fell 4.39, or 0.2%, to 2,513.82.
In currencies, the dollar fell to ¥83.09 from ¥83.13 late Monday. The euro rose to $1.3604 from $1.3570.
Benchmark crude for December delivery was down 51 cents at $84.35 a barrel in electronic trading on the New York Mercantile Exchange. The contract slipped 2 cents to settle at $84.86 on Monday.
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First Published: Tue, Nov 16 2010. 10 52 AM IST
More Topics: Stocks | Markets | Asia | South Korea | Kospi |