Gold Silver Reports – Investors should look through the worries about a faster pace of U.S. monetary tightening that have shaken Asian stocks so far this week, according to Goldman Sachs Group Inc.
Stocks in the world’s fastest-growing region should be able to cope with four interest-rate hikes, the bank’s strategists said after remarks by Federal Reserve Chairman Jerome Powell Tuesday sent Asia’s benchmark MSCI AC Asia Pacific Index tumbling. The drop was part of a global sell-off prompted by Powell’s indication that the Federal Open Market Committee could pick up the pace from the three rate increases previously projected for 2018.
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A look at Asian equity performance during Fed hiking cycles shows a varied picture, “but broadly suggests that markets can absorb a more persistent FOMC, particularly since the absolute level of policy rates is still low,” analysts led by Timothy Moe said in a research report published on Wednesday.
Investors aren’t quite on board with that yet. The MSCI Asia Pacific Index has lost 1.7 percent since Powell spoke at a congressional hearing Tuesday. Japan’s Topix index dropped 2.8 percent in the same period. Powell appears at Congress again Thursday. – Goldman Neal Bhai Reports – INDIA
