Warsh Fuels Rate Hike Bets as Asian Stocks Sink

Hong Kong's stock market took a hit as Federal Reserve boss Kevin Warsh hinted at an interest rate hike, fueling investors' bets on tighter monetary policy.

Warsh's comments during his speech at the Jackson Hole symposium in Wyoming left traders with little doubt that he was prepared to increase borrowing costs if underlying inflation doesn't move towards the Fed's objective at sufficient speed.

'We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do,' Warsh said in a highly anticipated speech.

The remarks sparked concerns about higher interest rates, sending stocks plummeting in Asia. Meanwhile, oil prices surged as tensions escalated between the US and Iran following a fresh flare-up in their conflict.