Asian markets extend Wall St losses; China COVID cases rise

BANGKOK (AP) — Shares slipped in Asia on Monday after last week’s decline on Wall Street, while signs of a surge in coronavirus infections in China suggested progress may be bumpy as it rolls back its “zero-COVID” pandemic restrictions.

Attention was turning to an update on U.S. consumer prices and the Federal Reserve's last meeting of the year.

The last big piece of data on inflation before the Fed’s next decision is due Tuesday, when economists expect the consumer price index to show inflation slowed to 7.3% last month from 7.7% in October.

Meetings of major central banks including the Fed mean “there is potential for a whole load of volatility in markets; especially given the palpable tensions between inflation risks and fears of policy-induced recession," analysts at Mizuho Bank said in a commentary.

A survey of Japanese manufacturers showed a sharp deterioration in the outlook, with recession a growing possibility in the U.S. and other major markets. The business survey index fell to minus 3.6% in October-December from 1.7% in the previous quarter as manufacturers grappled with high prices for energy and other raw materials.

Hong Kong's Hang Seng sank 2.1% to 19,484.88 and the Shanghai Composite index shed 0.7% to 3,186.05.

Tokyo's Nikkei 225 index gave up 0.2% to 27,835.63 while the Kospi in Seoul lost 0.6% to 2,375.27.

Australia's S&P/ASX 200 declined 0.4% to 7,181.40.

China was setting up more intensive care facilities and trying to strengthen hospitals as it rolls back anti-virus controls that confined millions of people to their homes, crushed economic growth and set off protests.

The precautions come as the number of cases appeared to be rising, though a sharp reduction in the number of tests makes measuring any changes uncertain.

President Xi...