It's not only China's weakening economy that's giving Asia investors the jitters. Reuters' Tara Joseph reports that the prospect of more aggressive U.S. interest rate rises is also hitting markets here.
A double whammy for Asian markets. China's economic slump already has investors worried, but now the prospect of more aggressive U.S. interest rate hikes is sending investors scurrying for cover. Asia's benchmark stock index looks set to post losses for the month of May. While recently strong currencies like the Malaysian Ringgit have suddenly headed due South. About 3.2 billion dollars flowed out of Asian equity markets from Seoul to Sydney in the first three weeks of May alone. Now investors expect the Federal Reserve to go ahead and raise rates as early as next month, and that could lead to a so called "taper tantrum" - where investors take their money out of emerging markets and pour it back into the United States. The turnaround in Asia markets comes just as some countries like India had become bright spots in murky times for emerging market investors... while other regions like Latin America struggle with steep recessions. But Asian debts, both government and corporate, are piling up too... and a U.S. rate rise means the cost of borrowing could also rise - a worrying concept for nervous investors. China's economic slowdown has halted demand for everything from commodities to luxury retail. Now it's the Federal Reserve hurting confidence in markets here, sending signals that it could be a bumpy summer ahead.