Asian Equities Could Perform Well Despite Further Potential Fed Rate Hikes

Dow Jones10-08 16:49

0849 GMT - Asian equities are likely to perform well despite the likelihood of more Federal Reserve rate hikes, say HSBC Global Investment Research analysts in a note, citing past rate-hike cycles where the region's stocks delivered average gains of around 15%. Asian equities tend to de-risk in anticipation of tightening, but once the hiking path becomes clearer, equities typically stabilize, they say. Money markets are currently pricing in three rate hikes, compared with HSBC's expectation of just one, the analysts note. Any recalibration toward HSBC's single-hike view could provide further support for Asian equities. Regional valuations remain attractive, as forward price-to-earnings ratio valuations are down to 10X from 14X this year, they add.

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