Asian shares tumbled on Monday after a sharply lower finish for major U.S. indexes on Friday amid concerns central banks, particularly the Fed, will become less accomodative.

Down Under, the ASX 200 closed down 2.24 percent, or 119,582 points, at 5,219.1, weighed heavily by the energy sector, which was down 3 percent, the materials subindex, which shed 3.23 percent, and the financials sector, which was lower by 2.01 percent.

The Japanese benchmark index ended lower by 1.73 percent, or 292.84 points, at 16,672.92; South Korea's Kospi finished down 2.28 percent, or 46.39 points, at 1,991.48 from levels above 2,040 just last week.

In company news, Samsung weighed on the Kospi, with its shares dropping 6.98 percent, extending losses from the previous session after the South Korean firm and several airlines urged all customers to stop using the Galaxy Note 7 smartphones amid concerns over fire-prone batteries.



Mainland China markets slumped: The composite closed down 1.88 percent, or 57.965 points, at 3,020.937 and the Shenzhen composite shed 2.659 percent, or 57.965 points, to 1,977.057. In Hong Kong, the index slid 2.85 percent as of 3:15 pm HK/SIN time.

"Traders have been quick to price in worst case scenario as interest rate rise jitters start taking hold and have resulted in some fairly assertive moves in bond, equity, and forex asset classes," said Stephen Innes, senior trader at OANDA, in a Monday note.



The rising risk sentiment was because "one, the ECB did not extend QE, provoking a sell-off in bond markets, which fed into the medium to long-end U.S. bond curve. Two, traders have convinced themselves the Fed are marching out Leal Brainard, a mega-dove, to bang the Fed's September rate hike drum," he added.

Fed Governor Lael Brainard was scheduled for a surprise speech at the Chicago Council on Global Affairs later on Monday.

Other recent Fed speakers have also sounded more hawkish notes.

On Friday, Boston Fed President Eric Rosengren had said that the U.S. economy has proven to be more resilient to exogenous risks and that "gradual tightening is likely to be appropriate."

Rosengren's speech was cited by traders as a catalyst for the market volatility, said Chris Weston, chief market strategist at IG, in his morning note..</s>Fifteen years ago this week, US stock markets were closed, with stunned investors bracing themselves for heavy losses following the September 11th attacks that resulted in the deaths of almost 3,000 people.

Heavy losses did indeed follow, but the obvious lesson for investors from this sorry episode is simple: stock markets are resilient to terrorist attacks and it seldom pays to sell in times of panic.

The New York Stock Exchange (NYSE) was closed in the immediate aftermath of the attacks, not reopening for trading until the following week, on September 17th – its first prolonged closure since 1933. A mini-crash followed: the Dow Jones Industrial Average fell 7.1 per cent – 684 points, its biggest one-day point fall on record.

Stocks continued to tumble for the rest of the week, the Dow enduring a 16 per cent peak-to-trough decline. Airline stocks were worst hit – a number of airlines saw their share prices more than halve while the Dow Jones Transportation Average quickly lost more than a quarter of its value.

The market panic was a short-lived affair, however. The Federal Reserve cut interest rates and flooded the financial system with liquidity, reassuring investors. By the middle of October, stocks were back to pre-attack levels and indices continued to advance, with both the S&P 500 and the Dow gaining in the region of 25 per cent over a three-month period.

The market reaction to 9/11 echoed that seen following another attack on American soil, the Japanese bombing of Pearl Harbour in 1941. Stocks fell by 4.4 per cent on the Monday following the attacks and by another 3.3 per cent the following day before quickly stabilising.

But, within weeks, the Dow had nearly erased its post-attack losses, with stocks going on to post stellar returns over the following years.

In 1920, 38 people lost their lives following an anarchist bomb attack on Wall Street that resulted in the immediate shutdown of the NYSE. When the exchange reopened for trading the following day, stocks bounced by 1.5 per cent.

This pattern – a short-lived market shock that is quickly followed by equity index rebounds – is typical. Examining 25 global terrorist attacks over the last five decades, Charles Schwab strategist Jeffrey Kleintop found that, on average, stocks returned to pre-attack levels in less than three weeks. On most occasions, markets had regained their composure within a week or less.

A similar picture emerges from analysis conducted by Ned Davis Research: three-quarters of the time, indices have gained within a month of a terrorist event.

If anything, markets appear to be increasingly blasé regarding the economic impact of terrorist events. Investors’ default reaction appears to be that terrorist-induced declines are a buying opportunity, resulting in increasingly brief declines.

For example, Indonesian equities quickly plunged 10 per cent after the 2002 Bali bombings that killed 202 people but these losses were erased within a month. Spain’s Ibex 35 index fell by 3.1 per cent in the hours following the Madrid bombings of March 2004 but major market indices were back to pre-attack levels within weeks. In 2005, British share prices quickly fell by 4 per cent following reports that 52 people had been killed in co-ordinated bomb blasts across London but, on this occasion, the bulk of those losses had been erased by the end of the trading day.

In particular, the spate of Islamic terrorist attacks over the last 18 months has gone largely unnoticed by investors. France’s CAC-40 advanced on the day of the Charlie Hebdo attacks in January 2015. The co-ordinated Islamic State attacks of November 2015 that resulted in the deaths of 130 people in Paris initially resulted in the French equity index sliding by 1.2 per cent, but the CAC 40 stocks ended the day flat while the pan-European Stoxx 600 index posted small gains.

The “terrorism trade”, noted Bespoke Investment Group at the time, “lasted less than a session”. French stocks were largely unaffected by the Nice truck attack in July that left 84 people dead. In March, Belgium’s BEL 20 index fell by 1.3 per cent after Islamic State militants killed 32 people in co-ordinated bomb blasts in Brussels, but the index ended the day slightly higher, as did the Stoxx 600.

It’s natural that the aforementioned terrorist incidents did not affect stock markets to the same degree as the 9/11 attacks; in terms of scale, September 11th dwarfs the jihadist attacks of the last 15 years. It’s reasonable to infer, however, that investors’ perception of terrorist events changed in the aftermath of September 11th.

A 2013 study, The Impact of Terrorism on Stock Markets, noted that stock markets have learned not to overreact and to “more objectively” evaluate the “real economic consequences” of terrorist attacks. Markets tend to be agitated by shock events, but terrorist attacks are no longer unexpected; rather, they are increasingly priced into stocks, with market dislocations noticeably diminishing over time.

Even retail investors, who have a reputation for skittish behaviour in times of uncertainty, appear nonchalant regarding the impact of terrorist atrocities on their portfolios. In April, a Bankrate Financial Security Index survey asked people if the terrorist attacks in France and Belgium had affected their willingness to invest in stocks. The vast majority said it made no difference either way; 11 per cent did say they were less inclined to invest but 5 per cent said they were more likely to invest in equities.

Recessions tend to be the primary drivers of equity bear markets, but the economic impact of terrorist events tends to be limited. The US recession of 2001 is often associated with 9/11, but America had fallen into recession in March 2001; it officially ended in November 2001, with some estimates suggesting that the attacks reduced US GDP growth by half a percentage point.

Attacks can hit confidence in the short term, but acts of terror “do not derail economic trends in mature western economies”, to quote a 2015 Berenberg Bank report.

Tourism can be badly affected by terrorism – tourist numbers are down by 7 per cent in France this year – although again this effect appears to be waning, with Deloitte last year noting that hotel occupancy rates tend to recover due to the “emergence of a ‘carry on as normal’ culture in response to terrorism” over the last decade.

There is of course a danger that investors could take this “carry on as normal” culture too far and become complacent about the indirect impact of terrorism. For example, while 9/11 did not derail the US economy, it led to the US invasion of Afghanistan and was also used to justify the 2003 Iraq war.

Furthermore, the Federal Reserve slashed interest rates and left them at lowly levels even as the economy began to boom in 2004, with many commentators complaining that the 9/11 effect resulted in them maintaining an excessively loose monetary policy that ultimately led to the housing bubble and subsequent financial crash.

Similarly, while jihadist attacks may not hit European GDP, they have increased political risks across Europe.

Still, it is nigh on impossible to quantify the impact of such political risks on stock markets. Even if one had a crystal ball in relation to political developments, divining the response of stock markets is another matter entirely, as shown by the post-Brexit rally of recent months.

Fifteen years on from 9/11, investors have learned to accept that event risk in the form of terrorist attacks is not going to go away. They have learned to live with that risk, realising that it does not pay to panic at such times; whatever about the human cost of terrorism, the financial cost to investors tends to be an increasingly short-lived affair.</s>September is historically the worst (and most volatile) month of the year for the stocks. Will that be the case this year too?

Hopefully not. Investors got some good news Monday. Even though stocks in Europe and Asia fell sharply Monday morning, Wall Street took those losses in stride.

The Dow, S&P 500 and Nasdaq were all up slightly in late morning trading -- and the market moved even higher after Federal Reserve governor Lael Brainard said in a speech Monday afternoon that the case to raise rates soon is "less compelling" than some thought and added that the Fed needed to show "prudence" before lifting rates.

So was Friday's nearly 400-point loss at the Dow a one-time event? Stocks have been relatively quiet (some would argue too quiet) for most of the summer. Even with stocks down about 2% in September, they are not far from all-time highs.

But some investors are worried that the Federal Reserve might finally be ready to start raising interest rates again. That was the big reason for the market slump on Friday.

The Fed hiked rates once last December for the first time in nearly a decade. But the Fed hasn't touched rates again since then. So they are still pretty close to zero.

Investors have arguably gotten too used to rates being this Uber-low. Rates may now need a Lyft. (Ha! Dorky ridesharing humor. Sorry. I'll Gett back to business as usual now.)

A series of small and steady rate hikes is hardly a reason for the market to collapse. It's not exactly 2008 all over again. And many experts think that Fed chair Janet Yellen has no plans to raise rates drastically.

"We have been through this a zillion times. The market is doing okay and then we start hearing about the Fed looking to raise rates and stocks fall," said John Norris, managing director for Oakworth Capital.

Related: Summer's over? Dow plunged almost 400 points on Friday

"But the concern would be the Fed being overly aggressive. I don't think the Fed wants to do that. They want to get rates to 1% to 1.5% and then be done with it." Norris added.

Ted Parrish, founder of Parrish Capital, agrees. He thinks the market needs a healthy selloff to get some of the complacent momentum investors out of the market.

But Parrish is optimistic that fears of another big market (and economic downturn) will prove to be for naught.

"Nervous money can get out of the market and long-term investors will stay in." Parrish said. "Earnings should increase in 2017 and then the market can go back to moving on fundamentals. That would be nice."

Still, a pessimist could argue that the lack of a big rally on Monday is a worrisome sign. Sure, stocks didn't tank again. But where were all the opportunistic buyers looking to rush back in and scoop up blue chips on the cheap?

It may be unrealistic to expect stocks to surge dramatically higher. There may be the occasional big up (and down) day for stocks. But for the most part, the markets may remain relatively flat for the foreseeable future.

Outside of taking bets on the Fed -- and the U.S. presidential election -- there won't be much to move the market until we get more earnings reports in October.

"There's not much reason for the market to rally, but not much reason for it to sell off either," Norris said. "Stocks are not cheap, but they are not outrageously overvalued."

In other words, investors might want to brush up on their Green Day. Wake me up when September ends.</s>By Marley Jay, The Associated Press

U.S. stocks surged Monday after a Federal Reserve official said the central bank shouldn’t raise interest rates too soon, which came as a big relief to investors. After a market nosedive on Friday, investors bought safe investments like household goods makers and phone companies. Technology companies also jumped.

Stocks started the day lower following Friday’s drop, but they soon rallied. Investors were pleased when Lael Brainard, a member of the Federal Reserve board, said the Fed shouldn’t raise interest rates quickly because that could hurt the economy. The biggest gains went to safe investments that pay big dividends, as they are more enticing to investors when interest rates and bond yields are low.

Stocks had plunged Friday following remarks from another Fed official that suggested interest rates could go up next week.

David Kelly, chief global strategist for JPMorgan Funds, said he thinks Federal Reserve policymakers seem “noncommittal” and aren’t sure if they should raise interest rates now or not. In his opinion, the Fed’s cautious attitude toward raising interest rates even a little is causing strong market reactions.

“The more cautious they are, the more sensitive the market becomes,” he said. “What’s one quarter of one percent? It’s nothing.”

The Dow Jones industrial average jumped 239.62 points, or 1.3 percent, to 18,325.07. The Standard & Poor’s 500 index rose 31.23 points, or 1.5 percent, to 2,159.04. The Nasdaq composite surged 85.98 points, or 1.7 percent, to 5,211.89.

The gains in the main three U.S. indexes made up for more than half of Friday’s losses. As investors sought safe-play picks, retail giant Wal-Mart rose $1.64, or 2.3 percent, to $71.94 and Procter & Gamble gained $2.01, or 2.3 percent, to $88.25. Phone companies also rose and AT&T gained $1, or 2.5 percent, to $40.71. Those stocks took some of the biggest losses Friday.

HP agreed to buy Samsung’s printer business for $1.05 billion, and HP stock rose 54 cents, or 3.9 percent, to $14.49. That helped take technology stocks higher. Elsewhere, Apple rose $2.31, or 2.2 percent, to $105.44 and communications chip maker Broadcom picked up $3.70, or 2.3 percent, to $164.48.

Canadian companies Agrium and Potash Corp. of Saskatchewan agreed to combine into the world’s largest crop nutrient company. The companies value their combined business at $36 billion, and Potash shareholders will own a majority of stock in the new company. Potash stock lost 21 cents, or 1.2 percent, to $16.76 and Agrium dipped $2.57, or 2.7 percent, to $92.64.

U.S. stocks had plunged late last week after Federal Reserve Bank of Boston President Eric Rosengren said there’s a case to be made the U.S. central bank should raise rates sooner rather than later. Rosengren and Brainard have both been reluctant to raise rates too quickly.

Investors are not sure if the central bank will raise interest rates, and they’re not sure the economy is healthy enough to handle that. Higher rates threaten stocks by making interest-paying savings accounts and bonds more attractive to investors. They could also ding corporate earnings by raising companies’ borrowing costs.

U.S. crude rose 41 cents to $46.29 a barrel in New York. Brent crude, the benchmark for international oil trading, climbed 31 cents to $48.32 a barrel in London.

Gold fell $8.90 to $1,325.60 an ounce. Silver lost 37 cents, or 1.9 percent, to $19 an ounce. Copper gained 1 cent to $2.10 a pound.

Bond prices rose. The yield on the 10-year Treasury note fell to 1.67 percent from 1.68 percent. The dollar fell to 101.84 yen from 102.69 yen late Friday. The euro rose to $1.1241 from $1.1228.</s>TOKYO/HONG KONG, Sept 14 (Reuters) - Asian stocks fell to fresh six-week lows on Wednesday and the greenback stood strong against a broad swathe of currencies including the Japanese yen as concerns grew about the fading impact of the world's major central banks to stimulate growth.

Losses in stock markets across Asia deepened as rising bond yields and soaring volatility forced investors to unwind positions.

The MSCI's broadest index of Asia-Pacific shares outside Japan slid 0.2 percent, extending its decline since late last week to 4.2 percent.

Within the region, Japan's Nikkei led losers with a 0.3 percent decline as uncertainty grew ahead of a central bank policy meeting next week.

The BOJ plans to make its controversial negative interest rate policy the centrepiece of future monetary easing, promising to weigh further rate cuts as expansions to asset buying near their limits, the Nikkei newspaper reported on Wednesday.

"The moves in developed market fixed-income, which are largely behind the volatility, have stemmed from Japan and the potential changes in monetary policy," said Chris Weston, chief markets strategist at IG Markets.

"Secondly, some of the biggest systematic funds have had to alter their portfolios. The rest of the market participants have had to simply react."

Stock markets have come under pressure as investors cut positions after large inflows in recent weeks betting on a long period of low volatility and suppressed bond yields.

Inflows into emerging market equity funds amounted to $24 billion dollars over the past 10 weeks, the highest on record according to Bank of America Merrill Lynch flow data. An index of market volatility soared to its highest level in three months.

On Wall Street, S&P 500 Index lost 1.48 percent to 2,127.02, a two-month low. Although it has managed to hold above its 200-day moving average at 2,121, a break of that level could sap market confidence. Futures were flat.

Bond yields extended their rise, suggesting more losses for equity markets with yields on 30-year Japanese debt hitting the highest levels in six months, unnerving investors.

The 10-year U.S. Treasuries yield rose to a three-month high of 1.75 percent, having risen more than 20 basis points from a week ago.

The rise in U.S. bond yields came even as expectations on the Federal Reserve's monetary policy outlook hardly changed. U.S. interest rate futures are pricing in only about a 10 percent chance of a rate hike at next week's policy review.

While the rise in U.S. bond yields was in part due to heavy Treasury and corporate debt supply, it also reflected concerns about the limits of global central bank policy in reviving growth.

Bond markets have come under pressure in recent days from unease about a possible U.S. rate hike this month, news that the Bank of Japan is studying ways to steepen the bond yield curve and disappointment at the lack of clear forward-action plan by the European Central Bank at last week's meeting.

Jeffrey Gundlach, chief executive officer of DoubleLine Capital, said on Tuesday that long-term decline in global bond yields is over and investors are watching out for a likely fiscal expansion in the world's major economies where monetary stimulus has reached its limits.

The prospects of a U.S. rate hike by the year-end helped to underpin the dollar against other currencies.

The euro dipped to $1.12200, a slight decline on the day and the week while the dollar also gained to 102.99 yen from Tuesday's low of 101.42 yen.

The yen was also dented by the Nikkei newspaper report on the BOJ and negative rates.

Short-dated Japanese bond yields fell, with the five-year JGB yield slipping 2.5 basis points to minus 0.200 percent while the two-year yield fell 2.0 basis point to hit a six-week low of minus 0.265 percent.

Crude oil prices edged up after a 3 percent tumble in the previous session. Brent futures rose 15 cents to $47.25 a barrel, while U.S. light crude rose 20 cents to $45.10 as data from an industry group showed a smaller-than-expected build in U.S. crude stocks. (Editing by Shri Navaratnam and Kim Coghill)</s>How the Dow Jones industrial average fared on Monday

U.S. stocks surged Monday after a Federal Reserve official said the central bank shouldn't raise interest rates too soon, which came as a big relief to investors. After a market nosedive on Friday, investors bought safe investments like household goods makers and phone companies. Technology companies also jumped.

The Dow Jones industrial average climbed 239.62 points, or 1.3 percent, to 18,325.07.

The Standard & Poor's 500 index added 31.23 points, or 1.5 percent, to 2,159.04.

The Nasdaq composite leaped 85.98 points, or 1.7 percent, to 5,211.89.

The Dow is up 900.04 points, or 5.2 percent.

The S&P 500 is up 115.10 points, or 5.6 percent.

The Nasdaq is up 204.48 points, or 4.1 percent.</s>U.S. stocks pare losses, oil up as markets reassess central banks

NEW YORK, Sept 12 (Reuters) - U.S stock prices were slightly higher at midsession Monday after a Federal Reserve policymaker expressed caution about the need to raise U.S. interest rates, though European and Asian equities finished lower after the biggest fall on Wall Street since June on Friday.

Federal Reserve officials have raised the chances of another interest rate rise this year in the past few weeks and the European Central Bank and Bank of Japan have also refrained from further monetary policy easing recently, culminating in Friday's revaluation of stocks after U.S corporate earnings fell for the fifth straight quarter.

Federal Reserve governor Lael Brainerd is also due to make a speech in Chicago later Monday, the last policy maker to speak before next week's Fed policy meeting.

At 11:45 a.m. ET (1545 GMT), the Dow Jones industrial average was up 72.38 points, or 0.4 percent, to 18,157.83; the S&P 500 had gained 11.92 points, or 0.56 percent, to 2,139.73 and the Nasdaq Composite had added 43.52 points, or 0.85 percent, to 5,169.43.

A gauge of equities across major markets fell 0.3 percent after losing 1.0 percent earlier. European stocks were down 1.0 percent, cutting an earlier loss in half.

U.S. stocks began to recover Monday morning after Atlanta Federal Reserve Bank president Dennis Lockhart said current economic conditions warrant a "serious discussion" of whether to raise interest rates at next week's Fed meeting, also telling reporters there was no "urgency" to act.

"Lockhart helped assuage fears that a rate hike in September was imminent," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

The U.S. dollar slipped against the Japanese yen on Monday as uncertainty surrounding the potential Federal Reserve rate hike this month fueled a selloff in riskier currencies, while speculation less monetary policy easing from the Bank of Japan also helped the yen.

The greenback was last down 0.66 percent against the yen at 102 yen and was little changed against the euro at $1.123.

The benchmark U.S. Treasury yield turned higher midsession Monday and hit a session high of 1.697 percent, the highest since late June.

In commodities markets, crude oil prices turned positive with traders citing a weaker U.S. dollar.

Brent crude futures were up 1.1 percent at $48.58 a barrel, having recovered from a session low of $46.90, while U.S. crude rose from an intraday low of $44.72 to trade at $46.47, up 1.2 percent.

The biggest fall in U.S. crude oil inventories since 1999 last week, and hopes for a deal between Saudi Arabia and Russia on stabilizing crude output at this months OPEC meeting, have helped to support oil prices in the past week

Adding to Monday's jittery markets mood, U.S. Democratic presidential candidate Hillary Clinton fell ill at a Sept. 11 memorial ceremony and had been diagnosed with pneumonia.

Markets have generally assumed Clinton would win the presidency and have not truly considered the implications, both economic and for national security, should her rival Donald Trump prevail.</s>Asian shares mostly down on worries about global growth, Fed

TOKYO (AP) — Asian shares mostly sagged Wednesday, although oil prices regained overnight drops, amid the possibility of a weaker global economy and guess work about the U.S. Federal Reserve's plans for interest rates.

KEEPING SCORE: Japan's benchmark Nikkei 225 lost 0.7 percent to close at 16,614.24. Hong Kong's Hang Seng was little changed at 23,218.34. The Shanghai Composite fell 0.6 percent to 3,005.35. South Korean markets were closed for a national holiday. Shares were lower in Singapore, Indonesia and Taiwan.

FED FACTOR: Markets are on the lookout for what the Federal Reserve might do on interest rates, weighing in various signs of possible economic recovery. Economists say December is the most likely time for the Fed to hike rates for the first time this year.

WALL STREET: The Dow Jones industrial average gave up 258.32 points, or 1.4 percent, to 18,066.75. The Standard & Poor's 500 index fell 32.02 points, or 1.5 percent, to 2,127.02. The Nasdaq composite lost 56.63 points, or 1.1 percent, to 5,155.26.

THE QUOTE: "Another nail in the coffin overnight, as both OPEC and the International Energy Agency, revised their oil demand figures for 2017 down," said Jeffrey Halley, senior market analyst at Oanda.

ENERGY: The price of oil recovered some of its 3 percent overnight drop which followed the International Energy Agency's remarks about oil demand because of a slowdown in the global economy. Benchmark crude rose 22 cents to $45.12 a barrel. It fell $1.39, or 3 percent, to $44.90 a barrel in New York Tuesday. Brent crude, the benchmark for international oil prices, rose 18 cents to $47.28 a barrel in London.

CURRENCIES: The dollar rose to 102.89 yen from 101.98 yen late Tuesday in Asia. The euro fell to $1.1226 from $1.1233.</s>The US and Russia have agreed to a cease-fire in Syria following extensive negotiations. The move may pave the way to ending the deep crisis that has seen hundreds displaced and driven them to seek asylum in Europe. As per the agreement the two sides will stop the fighting on September 12.



 While the peace agreement in Syria will hopefully lead to a constructive outcome over the coming days, the global markets may not witness the calm from the past weeks as the date for US policy meet inches close. 



 Europe



 Mature markets are clearly prepared for the imminent monetary policy tightening in the US and have even been strongly betting on the possibility of it coming as early as the end of the month. However, the recent round of economic data from the US has put the optimism back in the cold. The disappointment from the weak figures has hit the market sentiment and will cloud the mood over the coming days, especially given the lack of direction in the near term.



 Further, the European Central Bank in its latest meet did nothing to cheer the mood as the policy makers maintained a cool stance on further stimulus for the region. The ECB’s Euro 1.7 trillion quantitative easing programme is set to end early next year. The central bank chief Mario Draghi has indicated the future course of action is not yet firm, triggering worries over the availability of cheap money going forward.



 Despite the markets witnessing a revival over the past months, the concerns over economic growth have continued to haunt investor mood. Given the lack of clarity, both in terms of triggers for economic growth and the ECB’s future course of action, indices may be set to reverse to the phase of volatility in the coming days.



 Euro Stoxx 50 closed down 0.98 per cent to 3,053.20. FTSE 100 closed down 1.19 per cent to 6,776.95.



 US



 The September 21-22 US Federal Reserve meet is a hotly anticipated event as the betting on the timing of an interest rate hike remains a key catalyst for market moves not only in the world’s largest economy but across the globe. A string of weak economic data for unemployment, manufacturing and services activity has dampened the prospects of a September hike and also impacted the market mood.



 Experts have been making a case for policy tightening saying delaying the process may threaten stability going forward. The markets have enjoyed a long spell of cheap money flows and interest rate action will work towards mopping up the excess liquidity, a scenario that does not please the indices. In addition, the ECB has underplayed the prospects of further stimulus expansion. Over the past years, the indices have gotten used to liquidity boosted by accommodative central bank policies. However, given the trend seems set to change, the market upside will likely be capped going ahead.



 Investors will be eyeing the reports for industrial production,consumer sentimentand retail sales for further cues.



 Nasdaq closed down 2.54 per cent, to 5,125.91. Dow Jones Industrial Average closed down 2.13 per cent, to 18,085.45. S&P 500 closed down 2.45 per cent to 2,127.81. 



 Asia



 The upcoming monetary policy meets in Japan and the US will be keenly watched over the coming days and any indications on the tone from the outcome of the meets will remain a key trigger for market movements. While the Bank of Japan will take a call on the stimulus package, the Federal Reserve has to decide on interest rates.



 Given that the European Central Bank held off from announcing any further stimulus in the latest meet, the move from the Japanese policymakers will be closely watched. Markets in the US and Europe dropped following a muted response from the ECB on further stimulus for the region as the markets grapple with the uncertainty following the UK referendum vote in June. The ECB’s current quantitative easing programme is set to run its course early next year. The investors can still hope for stimulus announcement by the end of the year given the mounting concerns on the impending impact from Brexit.



 The outcome of the US Central bank has been at the heart of frenzied speculation over the past weeks and will continue to sway market mood in the coming days.



 Japan’s Nikkei 225 closed up 0.04 per cent at 16,965.76. Shanghai closed down 0.55 per cent to 3,078.85. Hang Seng closed up 0.75 per cent at 24,099.70.



 India



 The prospect of an interest rate hike in the US has had reactions in an entirely different direction for the Indian markets. Given the recent data from the world’s largest economy, the bets for any policy tightening as early as this month have cooled and helped drive investor optimism. The positive mood will likely persist in the coming days as foreign investors continue to pour funds into the markets. Despite the volatility at the start of the year the indices have yielded impressive gains for the investors versus those in the mature markets and in turn have continued to attract foreign inflows.



 However, the strong inflow also means the markets have turned increasingly susceptible to the geo-political and economic announcements on the western shores. This includes the impending US Federal Reserve’s monetary policy action, among others. The indices will likely witness an unstable patch of trading closer to the policy meetings in the US, as well as Japan, both scheduled over the next few days.



 Given the current economic scenario in the developed markets, the foreign inflows will likely continue and may even witness a spike in the near term. On the off-side, considering the market rally is driven by foreign investments, it will be hard to gauge how long it may last.



 The benchmark BSE Index closed down 0.85 per cent to 28,797.25. Nifty closed down 0.96 per cent at 8,866.70.</s>How the Dow Jones industrial average fared on Tuesday

U.S. stocks abruptly changed course again Tuesday and took large losses. Investors worried about the possibility of a weaker global economy and tried to anticipate the Federal Reserve's plans for interest rates. Energy companies fell with the price of oil after a leading industry group said demand for oil is down more than it previously thought.

The Dow Jones industrial average tumbled 258.32 points, or 1.4 percent, to 18,066.75.

The Standard & Poor's 500 index dropped 32.02 points, or 1.5 percent, to 2,127.02.

The Nasdaq composite shed 56.63 points, or 1.1 percent, to 5,155.25.

The Dow is down 18.70 points, or 0.1 percent.

The S&P 500 is down 0.79 points, or 0.04 percent.

The Nasdaq is up 29.35 points, or 0.6 percent.

The Dow is up 641.72 points, or 3.7 percent.

The S&P 500 is up 83.08 points, or 4.1 percent.

The Nasdaq is up 147.84 points, or 3 percent.
Asian stock markets open lower following the fall in the Dow Jones amid speculations about the Federal Reserve's target interest rates.