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Asian markets slip on Fed stimulus fears

Feb 21 2013 07:57 AFP

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Hong Kong - Asian markets saw early losses on 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 $85bn-a-month bond-buying introduced last year to support the economy and which has helped lift global shares.

Tokyo fell 0.80% by the break, Sydney lost 1.19%, Seoul was off 0.33%, Hong Kong slipped 1.33% and Shanghai was 1.39% lower.

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% and the S&P 500 lost 1.24%, with both markets having closed at more than five-year highs on Tuesday. The Nasdaq dropped 1.53%.

The dollar surged against the euro in New York trade, with the single currency ending at $1.3283, well down from $1.3390 the previous day.

In Tokyo on Thursday the euro bought $1.3285. The euro also sat at ¥124.50 compared with ¥124.37 in New York. The greenback fetched ¥93.67, against ¥93.61.

Qantas shares surged 4.15% after a surge in six-month net profit for the airline, which banked Aus$125m (US$128m) in compensation from Boeing because of delays in the delivery of the Dreamliner.

Sony slipped 1.55% in a muted response after it announced its long-awaited PlayStation 4 in New York without actually unveiling the console.

Oil prices were lower owing to a stronger dollar, with New York's main contract, light sweet crude for delivery in April, shedding 49 cents to $94.73 a barrel and Brent North Sea crude for delivery in April dropping 59 cents to $115.01.

Gold was at $1 559.90 at 02:35 GMT, compared with $1 595.20 late on Wednesday.

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