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

Majority of the Asian stock market indices were trading higher on 20 May, including China Shanghai Composite Index that was up 0.04% at 2,808.08 as of 6.10am GMT. This was despite a negative close overnight on the Wall Street amid hawkish comments from US Federal Reserve that suggested an increase in interest rates as early as June.

However, investors in the region were muted today (Friday) to such a move by the Fed, which would tighten the US monetary policy. This was because they were said to be taking the Fed's comments with grains of salt.

Asian markets: China Shanghai Composite gains despite a negative Wall Street close overnight
Majority of the Asian stock markets were trading higher on 20 May 2016 Reuters

Mark Matthews, head of research for Asia at private bank Julius Baer, said: "People are already starting to wonder how much truth there is to a summer rate hike, or if it is one of the Fed's countless charades. They don't want people to think there will never be a rate hike, so they have to have the threat of one out there."

Julian Jessop, chief global economist at Capital Economics, added: "The markets are complacent about the risks of further tightening over the next couple of years. Context, however, is everything: the gradual normalization of US interest rates will remain contingent on favorable economic and financial conditions that should limit the downside for asset prices."

Indices in the rest of Asia traded as follows on 20 May at 6.17am GMT:

Hong KongHang Seng Index19,932.08Up1.21%
JapanNikkei 22516,754.36Up0.65%
South KoreaKOSPI1,947.66Up0.05%
IndiaCNX Nifty7,794.00Up0.14%
AustraliaS&P/ASX 2005,351.30Up0.53%

Overnight (19 May), the Dow Jones Industrial Average closed at 17,435.40, down 0.52%, while the FTSE 100 closed at 6,053.35, down 1.82%.

Among commodities, oil prices were trading higher amid continued concerns of supply outages in Canada and Nigeria. On 20 May, WTI crude oil was trading 1% higher at $48.64 (£33.30, €43.40) a barrel, while Brent was trading 0.80% higher at $49.20 a barrel at 6.31am GMT.