Asian shares ease with Sydney down on consumer sentiment survey

Investing.com - Australia and Tokyo shares fell early Wednesday, tracking the U.S. overnight and with the dollar surrendering some gains.

Australia's S&P/ASX 200 was down 0.8%, after data showed consumer sentiment weakened sharply in September from August. The Westpac-MI Consumer Sentiment Index fell 4.6% to 94.0 in September, dipping sharply from near the key 100.0 level after a 3.8% month-on-month rise in August.

The Nikkei 225 was down 0.42% with Softbank Corp. (TOKYO:9984) down 1.4% on profit-taking following a 4.5% rise Tuesday. The stock has benefited in recent weeks from its 34% stake in Alibaba, which is expected to list later this month.

Overnight, U.S. stocks fell as concerns brewed that the Federal Reserve will hike interest rates sooner than later.

The Dow 30 fell 0.57%, the S&P 500 index fell 0.65%, while the NASDAQ Composite index fell 0.87%.

A Federal Reserve Bank of San Francisco report released on Monday hinted that markets may be underestimating the pace at which rates may rise, evidenced by low volatility.

"Recently, subdued levels of volatility in financial markets have received some attention. For example, Federal Reserve Chair Janet Yellen (2014) noted that 'indicators of expected volatility in some asset markets have fallen to low levels, suggesting that some investors may underappreciate the potential for losses and volatility going forward,''" the report read.

"Prices of financial assets, such as stocks and bonds, are sensitive to unexpected changes in interest rates because their present values are determined by discounting future cash flows. Thus, the low volatility in asset markets could, in part, reflect market participants’ relative certainty about the future course of interest rates."

Stocks fell as investors repositioned themselves for the end of ultra-loose monetary policies that have remained in place since the 2008 financial crisis.

Retail sales and consumer sentiment reports are due out on Friday, and expectations for solid readings also fueled talk that the Federal Reserve at its Sept. 16-17 meeting may hint or even unveil at a timetable as to when rates may rise.