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Stocks

Nikkei Asia300 Index trending down since start in December

Capital flight fears weigh as US rates rise

SINGAPORE -- The Nikkei Asia300 Index is on a downtrend, hampered by growing concerns over capital flight from Asia as more market watchers expect rate hikes in the U.S. to accelerate. 

The index, which was launched on Dec. 1, closed Dec. 30 at 1,032.56, 1.5% lower than the reference value as of the end of November. Since then the index has declined markedly, especially after the U.S. Federal Reserve decided on Dec. 14 to raise rates for the first time in a year.

The index continued to fall from Dec. 14 to 26 over fears that rising U.S. interest rates could spur investors to pull money from Asia and move it to the U.S., where the Fed expects to hike rates three times this year. 

By market, China and Hong Kong notched the biggest declines. But it is not just the movement of funds that has investors worried. Real estate and financial stocks also came under selling pressure as Beijing tries to keep the country's housing bubble in check. Shares in Cheung Kong Property Holdings and Ping An Insurance Group have fallen sharply.

Meanwhile, technology stocks in Asia are on the rise over expectations that U.S. President-elect Donald Trump's economic policy will boost tech companies' exports to the U.S. 

As big names in the region, such as South Korea's Samsung Electronics and Taiwan's Hon Hai Precision Industry, constitute a large proportion of the index, these stocks are expected to provide a boost for the entire index.

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