Asian shares mostly decline echoing US slide on rate worries

TOKYO (AP) — Asian shares were mostly lower Monday, reflecting pessimism over weakness on Wall Street as the squeeze by central banks around the world to curb inflation weighs on investor sentiment.

Japan's benchmark Nikkei 225 dropped 2.1% in morning trading to 26,587.08. Australia's S&P/ASX 200 dipped 1.3% to 6,489.80. South Korea's Kospi dropped 2.4% to 2,234.15. Hong Kong's Hang Seng edged up 0.6% to 18,039.95, while the Shanghai Composite gained 0.1% to 3,092.30.

“Momentum may follow from the further sell-off on Wall Street to end last week, with strength in the U.S. dollar weighing on Asian indices,” Yeap Jun Rong, a market strategist at IG in Singapore, said in a report.

The recent moves by the U.S. Federal Reserve and other central banks around the world to raise interest rates are designed to curb high inflation, but they also threaten a recession, if the rates rise too much or too quickly.

Wall Street ended last week with widespread selling, leaving major indexes with their fifth loss in six weeks. Data on European business activity was discouraging, and a separate report suggested U.S. activity is also still shrinking, though not quite as badly as in earlier months.

The S&P 500 sank 1.7% on Friday, to 3,693.23, its fourth straight drop. The Dow, which at one point was down more than 800 points, lost 486.27 points, or 1.6%, to close at 29,590.41. The Nasdaq fell 1.8% to 10,867.93.

Smaller company stocks did even worse. The Russell 2000 fell 2.5% to close at 1,679.59.

More than 85% of stocks in the S&P 500 closed in the red, with technology companies, retailers and banks among the biggest weights on the benchmark index.

Last week, the Fed lifted its benchmark rate, which affects many consumer and business loans, to a range of 3% to 3.25%. It was...