HONG KONG – A global stock market sell-off pulled shares lower in Asia on Wednesday as investors grew cautious following losses on Wall Street sparked by a delayed health care vote. Sentiment was dented in Europe by speculation that European Central Bank stimulus may be wound down if conditions improve.
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KEEPING SCORE: Hong Kong's Hang Seng led declines, falling as much as 0.7 percent. By midday it was down 0.4 percent at 25,747.90 while Japan's benchmark Nikkei 225 index lost 0.3 percent to 20,159.77. South Korea's Kospi shed 0.3 percent to 2,386.03. The Shanghai Composite index in mainland China edged 0.1 percent higher to 3,192.82 and Australia's S&P/ASX 200 gained 0.4 percent to 5,738.00.
CENTRAL BANKING: European Central Bank President Mario Draghi's upbeat comments about prospects for the 19-country eurozone were taken as a hint that policy change may be in the pipeline even though he did not mention plans to dial back stimulus measures, but markets took it as a hint that policy change was in the pipeline. Meanwhile, U.S. Federal Reserve Chair Janet Yellen, in a speech in London, said she didn't foresee another financial crisis "in our lifetimes." Market watchers also noted that she didn't say anything to contradict earlier statements about plans to gradually remove stimulus and raise rates if economic conditions continue to improve, indicating those plans are still on track.
MARKET INSIGHT: "The net effect of last night's speeches by Yellen and Draghi has been to reinforce a view that markets are now embarking on a phase of global policy tightening with the ECB potentially moving faster relative to the Fed than many had expected," Ric Spooner, chief analyst at CMC Markets, said in a commentary.
U.S. POLITICS: A decision by Republican Party leaders in the Senate to put off until after their July 4 recess a vote on a health care overhaul bill spurred a sell off. The delay added to investor worries about political gridlock and what it could mean for President Donald Trump's plans for health care reforms and other economy-boosting measures.
WALL STREET: The Standard & Poor's 500 index fell 0.8 percent to close at 2,419.38. The Dow Jones industrial average slid 0.5 percent to 21,310.66. The Nasdaq composite lost 1.6 percent to 6,146.62.
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ENERGY: Oil futures fell, with benchmark U.S. crude slipping 17 cents to $44.07 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained 86 cents, or 2 percent, to settle at $44.24 per barrel on Tuesday. Brent, the international standard, lost 8 cents to $46.57 per barrel in London.
CURRENCIES: The dollar slipped to 112.09 yen from Tuesday's 112.15 yen. The euro weakened to $1.1352 from $1.1347.