Asian shares decline ahead of Fed decision on interest rates

TOKYO (AP) — Asian shares mostly declined Wednesday as investors looked ahead to a widely expected interest rate hike by the U.S. Federal Reserve as it works to squash the highest inflation in decades.

Japan's benchmark Nikkei 225 dipped 1.4% to finish at 27,313.13. Australia's S&P/ASX 200 dropped 1.6% to 6,700.20. South Korea's Kospi lost 0.9% to 2,347.21. Hong Kong's Hang Seng shed 1.7% to 18,460.71, while the Shanghai Composite slipped 0.2% to 3,117.18.

Global tensions are adding to uncertainties. Russian-controlled regions of eastern and southern Ukraine have announced plans to start voting this week to become integral parts of Russia.

The Kremlin-backed efforts to swallow up four regions could set the stage for Moscow to escalate the war against Ukraine. Russian President Vladimir Putin recently blasted what he described as U.S. efforts to preserve its global domination and ordered officials to boost weapons production.

“Asian equities traded in a defensive mode on Wednesday. There were some geopolitical tensions concerning Russia and Ukraine, where the separatists are to hold a referendum in some regions, and traders were expecting an update from Putin,” Anderson Alves at ActivTrades said in a commentary.

On Wall Street, the S&P 500 index fell 1.1% on Tuesday to 3,855.93, as more than 90% of stocks and every sector in the benchmark index lost ground. The Dow Jones Industrial Average lost 1% to 30,706.23. The Nasdaq composite also fell 1%, to 11,425.05.

The selling came as traders waited to see how high the Fed will raise interest rates at its meeting that ends Wednesday.

Smaller company stocks fell more than the broader market. The Russell 2000 index gave up 1.4% to 1,787.50.

“The market is certainly bracing for the worst and you’re seeing a little bit...