Asian stock markets slip amid Janet Yellen'scommentsoninterestrates
Fed Chair Janet Yellen and Vice Chair Stanley Fischer are expected to speak later in the day Reuters

Asian stock market indices were trading lower on Friday (3 March), with the Shanghai Composite down 0.45% at 3,215.43 as of 5.48am GMT amid increasing chances that the US Federal Reserve might raise interest rates later this month.

According to FedWatch, a tool which helps gauge market reactions showed that the probability of the US central bank raising rates this month stood at 74%, up from the 30% seen at the start of the week.

This in turn had a negative impact on investor sentiment as an increase in rates would lead to an increase in borrowing costs of companies.

While Fed Chair Janet Yellen and Vice Chair Stanley Fischer are expected to speak later in the day, many expect them to reiterate the position. "The US dollar has been snapped up across the board as a March Fed hike is heavily priced in. All it took was about a hundred comments from Fed officials, but markets have finally decided that 'fairly soon' means less than two weeks and that perhaps 3 hikes this year means 3 hikes this year," Sean Callow, a senior strategist at Westpac was quoted as saying by Reuters.

Tensions rose between China and South Korea after Beijing ordered tour operators to stop selling trips to South Korea following China's concerns over the deployment of the US anti-missile system Terminal High Altitude Area Defence (Thaad) in South Korea. The backlash by China is said to have had a negative impact on South Korean equities.

Indices in the region were trading as follows at 6.15am GMT:

Hong KongHang Seng Index23,620.33Down0.45%
JapanNikkei 22519,447.10Down0.60%
South KoreaKOSPI2,077.45Down1.45%
AustraliaS&P/ASX 2005,729.60Down0.81%

On 2 March, the FTSE 100 closed 0.01% lower at 7,382.35 while the S&P 500 index closed 0.59% lower at 2,381.92.

Among commodities, oil prices gained marginally. As of 1.05am EST, WTI crude oil was up 0.13% at $52.68 (£42.95) a barrel, while Brent crude was trading 0.13% higher at $55.15 a barrel.