A rate hike from the U.S. Federal Reserve could spark a sell-off in Asian stocks and trigger capital outflows in China, according to Sam Le Cornu, co-head of Asian listed equities & head of investments at Macquarie Investment Management.
Markets have been fixated on monetary policy moves by central banks of late, with speculation of an interest rate hike by the Fed next month rising after some policymakers suggested the world's largest economy was picking up pace. A possible increase by the Fed will also come at a time when other major central banks such as the Bank of Japan and the European Central Bank are still biased to provide more stimulus.
"Unfortunately, sentiment has a huge amount of influence on the markets. If there is a Fed rate rise, there will implications for equities across Asia," Le Cornu said
"All assets are typically priced off of the risk-free rate of that government," Le Cornu told CNBC's "Squawkbox" on Thursday. A rise in the risk-free rate could be damaging to equities, he explained.