As volatile U.S. and Asian stock markets trend lower, it's Asia that could emerge as the bigger loser, given the region's softer economic prospects, one expert said.
U.S. markets rebounded on Thursday, and Asia shares were mixed on Friday, but the broadly lower trend for stocks is seen continuing.
That's because U.S. interest rates are rising on the back of "an environment of generally improving growth," Kathy Lien, managing director of FX Strategy for BK Asset Management, told CNBC's "Street Signs" on Thursday.
But in Asia, rates have been raised in a number of countries in "kind of a desperate need" to protect their respective currencies against a strong U.S. dollar, she added.
"It's not in an environment of positive growth trend so the pressure will be exacerbated in the emerging markets compared to the U.S. markets," said Lien, who's also a CNBC contributor.
"Unfortunately this is the beginning. I think that when we get sentiment shifts like these, they always last longer than we would like to see and we could see the selling continue for some time," she added.
Markets in Asia tumbled on Thursday morning, following in the footsteps of Wall Street which shrugged off several positive earnings reports amid fears that the ongoing tariff fight will dent business profitability in 2019.
Adding to the bad news in Asia, South Korea missed forecasts in its third-quarter growth. The economy expanded by 2 percent year-on-year in the July-to-September quarter, below the 2.2. percent expected by analysts polled by Reuters.
South Korea's export-oriented economy is threatened by a slowdown in global trade amid rising tensions between the U.S. and China.
South Korea is not the only Asian economy that relies on trade, so its disappointing growth is seen by some analysts as a barometer for the worsening outlook across the region.
"We ought to keep an eye out across the region given this weakness. Taiwan and Singapore share some, though not all, of (South) Korea's economic characteristics," Robert Carnell, ING's chief economist and head of research for Asia Pacific, wrote in a Thursday note.
'Positive political gridlock'
The worsened outlook for Asia comes at a time when several economies in the region are already reeling from recent capital outflows that knocked their currencies to multi-year lows.
But not all hope is lost for the region, Lien said, adding that many investors have not focused enough on "the possibility of change" in the coming U.S. midterm elections.
In the event that the Democrats gain control of the Senate, there could be "positive political gridlock" that is beneficial for Asian currencies and markets around the world, she said.
"I think the idea is if we do get a split government, President Trump will need to tamper his trade comments in order to get some of his other policies through. And I think that's what everyone is riding their hope on … this is what could really bring stabilization to the markets," said Lien.