Asian shares stumble as traders sweat on Fed rates

Asian shares slid on Thursday after a surprise interest rate hike by Bank of Canada brought back fears that U.S. rates could stay higher for longer and the Federal Reserve could remain hawkish when it meets next week.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was down 0.48%, while Japan’s Nikkei (.N225) fell 1%. Australia’s S&P/ASX 200 index (.AXJO) eased 0.29%.

The downbeat mood looked set to continue in Europe, with the Eurostoxx 50 futures off 0.30%, German DAX futures losing 0.31% and FTSE futures 0.06% lower.

Canada surprised markets on Wednesday by hiking its overnight rate to a 22-year high of 4.75%, with traders expecting another increase next month to cool an overheating economy and stubbornly high inflation.

The Bank of Canada (BoC) had been on hold since January to assess the impact of previous hikes.

This report’s information was first seen on REUTERS; to read more, click this link.