Asian markets: China Shanghai Composite slips amid Fed rate increase fears

Most Asian stock market indices were trading lower on 18 May, including China's Shanghai Composite Index that was down 1.60% at 2,798.06 as of 6.15am GMT. This followed a few policymakers at the US Federal Reserve saying that interest rates in the world's largest economy could be increased in 2016.

Dennis Lockhart, the Atlanta Fed President, said he continues to assume that there would be a rate increase. Dallas Fed President Robert Kaplan, added he would push for an increase in June or July.

Tomoaki Shishido, fixed income analyst at Nomura Securities, said: "Since the strong retail sales data last Friday, the Fed has clearly started a communication campaign to urge markets to price in a hike in June, even though markets have not gone there yet. They set (Fed Chair Janet) Yellen's speech on June 6, just after the next payroll data and just before the blackout period will start before the next policy meeting. They wouldn't have to do this if they have no plan to raise rates in June."

Indices in the rest of Asia traded as follows on 18 May at 6.22am GMT:

Overnight (17 May), the Dow Jones Industrial Average closed at 17,529.98, down 1.02%%, while the FTSE 100 closed at 6,167.77, up 0.27%.

Among commodities, oil prices which hit a seven-month high on 17 May continued to trade in the green. The rebound in oil prices was amid expectations of a decline in US crude inventory and a new wildfire threat in Canada that could further affect oil supplies. On 18 May, WTI crude oil was trading 0.31% higher at $48.46( £33.56,€42.95) a barrel, while Brent was trading 0.24% higher at $49.40 a barrel at 6.32am GMT.