Asian markets follow Wall St lower amid gloomy outlook

Beijing, Dec 20: Asian stock markets extended their losses Tuesday amid gloom about weaker global economic growth as central banks raise interest rates to cool inflation.
Shanghai, Tokyo, Hong Kong and Sydney declined. Oil prices edged higher.
Markets are sliding after the US Federal Reserve raised its key lending rate last week and the European Central Bank said more rate hikes are ahead. That fuelled investor fears central bankers might be willing to cause a recession to fight inflation that is at multi-decade highs.
Wall Street declined Monday for a fifth day after the Fed said last week rates might have to stay elevated longer than previously forecast.
“The tone in markets reflects a cloudy outlook for the global economy,” said Anderson Alves of ActivTrades in a report.
The Shanghai Composite Index lost 0.6 per cent to 3,087.32 after the World Bank cut its forecast of China’s economic growth this year to 2.7 per cent from its June outlook of 4.3 per cent. The bank cited repeated shutdowns of major cities to fight COVID-19 outbreaks.
The Nikkei 225 in Tokyo tumbled 2.4 per cent to 26,575.04 after Japan’s central bank, which has avoided joining the Fed and other central banks in raising rates, widened the range in which it will allow government bond yields to fluctuate. That will allow market interest rates to edge higher.
The Hang Seng in Hong Kong sank 1.4 per cent to 19,089.96 and the Kospi in Seoul lost 0.7 per cent to 2,334.05.
Sydney’s S&P-ASX 200 fell 1.5 per cent to 7,028.40 while India’s Sensex opened up 0.8 per cent at 61,806.19. New Zealand and Southeast Asian markets retreated.
Wall Street’s benchmark S&P 500 index fell 0.9 per cent to 3,817.66. The index is down about 20 per cent this year with less than two weeks left in 2022.
The Dow Jones Industrial Average fell 0.5 per cent to 32,757.54. The Nasdaq composite lost 1.5 per cent to 10,546.03.
Communications services stocks, technology companies and retailers declined. Disney slid 4.8 per cent, Microsoft fell 1.7 per cent and Home Depot dropped 1.9 per cent lower.
Facebook’s parent company fell 4.1 per cent after the European Union accused the company of breaching antitrust rules by distorting competition in the online classified ads business.
The Fed raised its short-term lending rate last week by one-half percentage in its seventh increase this year.
The federal funds rate stands at a 15-year high of range of 4.25 per cent to 4.5 per cent. The Fed forecast that will reach a range of 5 per cent to 5.25 per cent by the end of 2023. The forecast doesn’t call for a cut before 2024.
Investors were looking ahead to US economic reports this week for an update on the path of inflation. It has declined from its 9.1 per cent high in June but still stood at 7.1 per cent in November.
The National Association of Realtors reports November home sales on Wednesday. Also Wednesday, the Conference Board releases its consumer confidence report for December.
On Friday, the government will report November consumer spending. The report is watched by the Fed as a barometer of inflation.
In energy markets, benchmark US crude gained 30 cents to USD 75.68 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international oil trading, added 20 cents to USD 80 per barrel in London.
The dollar declined to 133.29 yen from Monday’s 136.99 yen. The euro held steady at USD 1.0604. (AP)