Asian stocks slump after Fed says US rates will rise 'soon'

BEIJING (AP) — Asian stock markets tumbled by unusually wide margins Thursday after the Federal Reserve indicated it plans to start raising interest rates soon to cool inflation.

Tokyo's market benchmark fell more than 3%. Hong Kong and Seoul lost more than 2%.

Wall Street's benchmark S&P 500 index lost 0.1% on Wednesday after a Fed statement said the U.S. central bank “expects it will soon be appropriate” to raise rates. Investors expect as many as four rate hikes this year, starting in March. The Fed said monthly bond purchases that push down long-term rates by injecting money into the financial system would be phased out in March.

“The Fed’s decision will reverberate globally, meaning that the era of low interest rate, ultra-low interest rate is over," said Francis Lun, CEO of Geo Securities in Hong Kong. “All the central banks will start to fight inflation instead of trying to stimulate the economy.”

The Nikkei 225 in Tokyo fell 3.2% to 26,152.12 and the Hang Seng in Hong Kong retreated 2.6% to 23,664.80.

The Kospi in Seoul sank 2.9% to 2,630.78, despite a stunning market debut for battery maker LG Energy Solutions, whose shares started trading at nearly twice their offer price after an initial public offering that drew the equivalent of $13 trillion in bids.

LG Energy Solutions' shares initially fell but then recovered, gaining 3.3%. The company drew massive interest due to expectations of huge growth in the market for electric vehicles. Its market capitalization of 105.3 trillion won ($87.62 billion) ranks it second in South Korea only to Samsung Electronics Co.

Samsung's shares fell 2.1% Thursday after it reported its operating profit for the last quarter rose by more than 53% from the same period last year as it thrived during the pandemic while relying...