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Asian Stocks Drop Ahead of Powell's Speech

Most Asian emerging equity markets slid on Wednesday ahead of a speech by the U.S. Federal Reserve chief as markets weighed the possibility of another rate hike by the central bank.

Share markets in Singapore and Indonesia fell 1.5% and 0.9% respectively, while Malaysia stocks posted minor losses.

"With upcoming speeches by the Fed Chairman on deck this week, FX markets traded in cautious fashion as we await the next clues regarding the path of U.S. interest rates," said KCM Trade analyst Tim Waterer.

Powell's speech before the Federal Reserve Division of Research and Statistics Centennial Conference later on Wednesday will be examined by investors for clues on the central bank's future policy path.

Singapore Telecommunications, the biggest telecoms firm in Southeast Asia, was the biggest drag on the local main index after its Australian unit, Optus, saw broad outages across the country.

Meanwhile, stocks in South Korea dropped nearly 1%, while the local unit reversed earlier advances to weaken marginally.

The won had risen as much as 0.9% earlier in the session after authorities announced plans to open the local currency market to global traders and extend trading hours, while promising to adopt rules to ensure reform does not lead to pricing discrepancies.

"The move by Korean authorities effectively removes some barriers for entry for foreign investors, with the net result likely to be greater liquidity and perhaps greater interest in trading the Korean won," said Tim Waterer, market analyst at KCM Trade.

However, the currency lost steam through the day as dollar strength and broader risk averseness caught up, analysts said.

The U.S. dollar was last up 0.2%. Other currencies in the region were subdued too. The Malaysian ringgit and the Indonesian rupiah eased 0.2% each. The Singapore dollar weakened 0.1%.

Source: Reuters

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