Asian stocks down after Wall St weekly loss on rate fears

BEIJING (AP) — Asian stock markets sank Monday after Wall Street ended with a loss for the week amid anxiety about Federal Reserve plans for more interest rate hikes to cool inflation.

Hong Kong's benchmark fell more than than 2%. Shanghai, Seoul and Sydney also retreated, while Tokyo was little-changed. Oil prices declined.

U.S. stock indexes ended with a weekly loss after a Fed official, James Bullard, rattled investors by suggesting the central bank's base lending rate might have to be raised to as much as almost double its already elevated level.

“Bullard dimmed the light on rallies,” said Tan Boon Heng of Mizuho Bank in a report.

The Hang Seng in Hong Kong was off 2.1% at 17,616.06 after the territory's leader, John Lee, tested positive for the coronavirus after returning from an Asia-Pacific meeting in Bangkok.

The Shanghai Composite Index lost 0.8% to 2,072.08 and the Nikkei 225 in Tokyo lost less than 0.1% to 27,904.69.

The Kospi in South Korea fell 1.2% to 2,414.20 and Sydney's S&P-ASX 200 lost 0.1% to 7,141.50.

India's Sensex opened down 0.7% at 61.212.75. New Zealand gained while Southeast Asian markets declined.

On Friday, Wall Street's benchmark S&P 500 index rose 0.5% to 3,965.34. The Dow Jones Industrial Average added 0.6% to 33,745.69. The Nasdaq composite lost less than 0.1% to 11,146.06.

All the major U.S. indexes ended with a loss for the week after Bullard, president of the St. Louis Federal Reserve Bank, gave a presentation that indicated the Fed's benchmark rate might have to rise to between 5% and 7%. That would be up from its current level of 3.75% to 4% following four hikes of 0.75 percentage points, three times the Fed's usual margin.

Investors worry repeated rate hikes by the Fed and central banks in Asia and Europe this year to...