Asian stocks fell Wednesday by the most in two weeks, extending a global slump, on speculation that the Federal Reserve will raise U.S. interest rates Thursday and signal further increases. Honda Motor Co. was among the big losers.
“There will be concerns about rate hikes in August and even September,” said Soichiro Monji at Daiwa SB Investments Ltd. in Tokyo. “Such ongoing rate hikes would negatively impact on the U.S. economy,” resulting in decreased earnings for exporters.
The Morgan Stanley Capital International Asia-Pacific index lost 1.3 percent, the most since June 13. All 10 industry groups retreated.
Japan’s Nikkei index fell 1.9 percent for the region’s biggest decline. Benchmarks dropped across Asia, expect for those in Thailand and Pakistan, which gained the most.
COMING BACK: European stocks rebounded on speculation that mergers and acquisitions will increase as rising interest rates dampen earnings growth.
“The appetite for M&A continues as corporate balance sheets remain very strong,” said Lucy MacDonald, chief investment officer of global equities at RCM Ltd. in London.
The Dow Jones Stoxx 600 index added 0.2 percent. The Stoxx 50 gained 0.3 percent, while the Euro Stoxx 50, a measure for the countries using the euro, was little changed. National benchmarks gained in 10 of the 18 Western European markets.
