Asian stocks follow Wall Street lower on economy fears

Asian stock markets were mostly lower Friday after Wall Street fell on fears interest rate hikes will depress global economic activity.

Tokyo, Seoul and Sydney fell. Shanghai and Hong Kong advanced. Oil prices edged lower but stayed above $115 per barrel.

Wall Street’s benchmark S&P 500 index tumbled 3.3% after Britain’s central bank followed the Federal Reserve in raising its key interest rate to cool surging price rises. Central banks in Switzerland and Taiwan also raised rates.

Investors worry the moves to control inflation that is running at four-decade highs might tip the US and other major economies into recession.

“Pain is being inflicted almost everywhere and sharing doesn’t make it better in any way,” said Tan Boon Heng of Mizuho Bank in a report.

Markets were not assuaged by comments by President Joe Biden to The Associated Press on Thursday that he saw reasons for optimism about the economy.

The Shanghai Composite Index advanced less than 0.1% to 3,287.88 while the Nikkei 225 in Tokyo fell 2.3% to 25,822.56. The Hang Seng in Hong Kong gained 0.6% to 20,983.41.

The Kospi in Seoul retreated 1.2% to 2,420.34 and Sydney’s S&P-ASX 200 tumbled 2.1% to 6,450.30.

New Zealand, Bangkok and Jakarta declined while Singapore gained.

On Wall Street, the S&P 500 retreated to 3,666.77 for its sixth decline in the past seven trading sessions. All but 3% of stocks in the index fell.

The benchmark gave up its 1.5% gain of the previous day after the Fed announced a rate hike of 0.75 percentage points, three times is usual margin. Chair Jerome Powell said Wednesday the Fed is “not trying to induce a recession now.”

The S&P 500 is 23.6% below its Jan. 3 record. That erases gains from 2021, one of Wall Street’s best years this century.

The dollar gained to 133.40 yen from Thursday’s 132.00 yen. The euro declined to $1.0536 from $1.0573.