Asian stocks reel under pressure ahead of Fed meeting

Most Asian stocks slipped into pressure amid oil price drop. The indications on possible interest rate hike from the US Federal Reserve also impacted the trading patterns.

Almost all the major indices in Japan, Australia, Hong Kong fell. Chinese Shanghai index rose on the positive news from the services sector. Asian stocks were trading at three-week lows.

Market analysts forecast that the pressure will increase on Asian stocks, once US Federal Reserve increases interest rate. The US-based investors withdraw funds from Asian markets.

According to a report by Market Watch, Australia's S&P/ASX 200 index fell 0.6 percent, South Korea's Kospi fell 0.99 percent, Japan's Nikkei fell 2.18 percent and Hong Kong's Hang Seng fell 0.3 percent. However, the positive news propelled Shanghai index. A private gauge of China's services sector showed growth in November. Albeit at a slower pace, the encouraging news buoyed the market.

The statements from European Central Bank (ECB) and US Federal Reserve added more pressure to the stock markets. Mario Dragi, President, ECB, announced monetary policy, which discouraged the market as it fell short of expectations.

The ECB has reduced deposit rate by 10 basis points to negative 0.3 percent. The asset purchase program is extended until March 2017.

CNBC further reports that the statement from Janet Yellen, US Federal Reserve Chair, indicating possible interest rate hike sent tremors across the world markets. Yellen was expecting improved job market. The US non-farm payrolls data for November will set the tone for US Fed.

Andrew Sullivan, Managing Director at Haitong Securities International, said the bank is "seeing money withdrawn from these markets by US-based investors".

Many prefer having money in the US even though the hike is going to be very small.

If US Fed hikes interest rate, then this will result in higher borrowing costs for the industry. This could also put pressure on global stocks.

According to Yahoo News, investors are busy with analyzing the impact of interest rate hike for the first time in nine years.

All eyes are on US Fed meeting in mid-December. US Fed also said that economy growth since last October is in line with expectations for inflation and labor market. The next US jobs report and inflation numbers will influence the US Fed.

Oil prices may continue to swing ahead of the US Federal Reserve meeting this month. Organization of Petroleum Exporting Countries (Opec) is firm on its decision on not to cut in oil production to defend its market share.

Several oil and commodity stocks on Australia Stock Exchange (ASX) dropped. Oil Search Ltd fell 1.85 percent, Woodside Petroleum dropped 1.32 percent, RIO fell 2.65 percent, Rio Tinto dropped 2.09 percent BHP Billiton fell 1.43 percent.