Fed’s Janet Yellen says US still on track for more rate hikes IBTimes UK

Most Asian stock market indices were trading higher on 23 May. The Shanghai Composite Index was up 0.50% at 2,839.65 as of 5.36am GMT. This followed a positive close on Wall Street last week despite hawkish comments from t he US Federal Reserve that suggested an increase in interest rates as early as June.

"Many investors at first seem to dismiss impending Fed hikes as inconsequential, only to worry once they have arrived," Frederic Neumann, co-head of Asian economics research at HSBC, said. "Any tweaks to its policy stance will quickly reverberate across the region. This need not be terminal, and it likely won't cause outright financial stress. But it'll get bumpy," Neumann added.

Asian markets: China Shanghai Composite gains after a positive close on the Wall Street
Barring Japan and Australia, rest of the Asian stock markets were trading higher on 23 May 2016 Reuters

The Japanese Nikkei index seemed to buck the bearish trend amid weak export data revealed by Japan's ministry of finance. The data showed that exports from the country had fallen by 10.1% on-year in April. This indicated poor demand from the US, China and emerging markets.

Going forward, investors would be concerned about the upcoming speeches of Fed chair Janet Yellen as they may throw more light on the interest rate hike. "Yellen's two speeches on May 27 and June 6 ahead of the June FOMC become critical in shaping that risk premium. A reiteration of the hawkish minutes will likely lead to front-end steepening and push USD [the dollar] higher," Andrew Sheets, chief cross-asset strategist at Morgan Stanley said.

Indices in the rest of Asia traded as follows on 23 May at 5.45am GMT:

Hong KongHang Seng Index19,920.58Up0.34%
JapanNikkei 22516,656.88Down0.47%
South KoreaKOSPI1,955.47Up0.40%
IndiaCNX Nifty7,769.65Up0.26%
AustraliaS&P/ASX 2005,327.40Down0.45%

Last week (20 May), the Dow Jones Industrial Average closed at 17,500.94, up 0.38%, while the FTSE 100 closed at 6,156.32, up 1.70%.

Among commodities, oil prices which recently touched seven-month highs were trading lower amid profit-taking by investors. On 23 May, WTI crude oil was trading 0.81% lower at $48.02 (£33.10, €42.78) a barrel, while Brent was trading 0.66% lower at $48.40 a barrel at 5.52am GMT.