Asia stocks follow Wall St down as Fed warns of higher rates
BANGKOK (AP) — Asian shares skidded Thursday after a retreat on Wall Street as markets registered their dismay over the Federal Reserve’s warning that still higher interest rates are in store following its latest increase.
Oil prices fell while U.S. futures edged higher.
Japan reported its trade deficit in November surged to over 2 trillion yen ($15 billion) as higher costs for oil and a weak yen combined to push imports higher. It was the 16th straight month of red ink and a record high for the month of November.
Tokyo's Nikkei 225 lost 0.4% to 28,051.70 and the Hang Seng in Hong Kong sank 0.9% to 19,498.32. The Kospi in Seoul gave up 1.3% to 2,367.91.
The Shanghai Composite index edged 0.1% lower to 3,173.21 and Australia's S&P/ASX 200 shed 0.6% to 7,204.80.
Shares fell in Taiwan and Bangkok but rose in Mumbai.
As expected, the U.S. central bank raised its key short-term rate by 0.50 percentage points on Wednesday. It was its seventh hike this year. The Fed also said it expects rates to be higher in coming years than it had anticipated.
Recent signs that inflation has eased had stoked optimism that the Fed might signal the possibility of rate cuts in the second half of next year. But during a press conference, Fed Chair Jerome Powell emphasized that the full effects of the central bank’s efforts to slow the economy to bring down inflation have yet to be fully felt.
“The Fed did not welcome the disinflation trends that have just started to emerge and focused on robust job gains and elevated inflation. Any hopes of a soft landing disappeared as the Fed seems like they are committed to taking rates much higher," Edward Moya of Oanda said in a commentary.
The S&P 500 lost 0.6% to 3,995.32, giving up an earlier gain of 0.9%. The Dow Jones Industrial Average fell...
