Stocks in the Asian market faced a steep decline for the second day following the drop in oil to less than $40 per barrel. In addition to the oil price drop, investors were also curious about the US financial policy. The MSCI Asia Pacific Index in Tokyo dropped 0.5% to 128.10, moving towards the lowest end of a week. Shares in the US recoiled on Wednesday amid the volatility in the future of interest rate increase.

Mark Lister, leader of private wealth research at Craigs Investment Partners, said Bloomberg that the authorities at the Federal Reserve Bank want to proceed with the interest rate hikes, urging investors to scale back from the market. He added, "Not surprising given the strong rebound that we've seen. Concerns remain about how sharp the slowdown is in China. You still have deflationary pressures and geopolitical risks."

Meanwhile, head of the central bank in China is due to speak on Thursday because trading in certain places in Asia lost its motion ahead of Easter leave. Topix index in Japan dropped 0.6% while Kospi Index in South Korea lost 0.3%. Stocks in Australia's S&P/ASX 200 Index and New Zealand's S&P/NZX 50 Index lost 1.1% and 0.1% respectively.

According to MarketWatch, the strengthening US dollar over regional currencies burdened Asia stocks further, with Hang Seng Index in Hong Kong falling 0.9% and China's Shanghai Composite Index dropping 1%. The US dollar gained its momentum amid the belief that Fed might increase interest rates in April. Energy stocks in Asian market also dropped owing to the slump in oil prices.

Following the Easter holidays, stock markets in Australia, Hong Kong, Singapore, Indonesia and New Zealand will close on Friday. The Chinese authorities in the morning directed the yuan weaker over the US dollar from Wednesday.

However, on Wednesday, the Shanghai Composite Index increased 0.4% helped by technology stocks and ChiNext index improved 20% from a low in February. E-mini stocks on S&P 500 Index fell 0.1% on Thursday. Crude in West Texas Intermediate dropped 4% amid robust dollar and oversupply of oil from producers. In addition, the oil deal for May delivery dropped as high as 0.6% on Thursday.

CNBC said that Australia's benchmark ASX 200 was down by 1.05% hurt by monetary subindex that was down 1.95%. Banking stocks in Australia fell down sharply, with Commonwealth Bank of Australia down by 2.27%, NAB down 2.92%, ANZ was off 5.41% and Westpac off 4.11%.  

Earlier Thursday, ANZ said it was anticipating credit charges to rise by a minimum of A$100 million during the first six-month period of 2016, beating its previous forecast of A$800 million. Meanwhile, the Australian dollar retreated in the currency market over the US dollar, pedalling back to its $0.75 mark.

Overall, the stock market in Asia was hurt by rising US dollar and poor oil price. Moreover, investors are pulling back from the market over the anxiety of Fed interest rate hikes.