Asian shares decline after retreats on Wall Street, Europe

BANGKOK (AP) — Asian shares followed Wall Street and Europe lower on Friday, with markets jittery over the risk that the Federal Reserve and other central banks may end up bringing on recessions to get inflation under control.

Oil prices and U.S. futures edged higher.

China's move to relax COVID restrictions has raised hopes for an end to massive disruptions from lockdowns and other strict measures to prevent infections. But signs of sharply rising case numbers have raised uncertainty, with some alarmed over the possibility that the pandemic will continue to drag on the economy.

Hong Kong's Hang Seng edged 0.1% higher to 19,395.84, while the Shanghai Composite index shed 0.4% to 3,157.58.

Tokyo's Nikkei 225 lost 2% to 27,498.14 after a survey of manufacturers showed a further contraction in output.

The preliminary reading of a factory purchasing manager's index put manufacturing at 48.8, down from November's 49.0, on 0-100 scale where 50 marks the break between contraction and expansion.

“This is consistent with the downbeat production forecasts issued by firms. Lingering weakness in demand was likely the main cause," Capital Economics said in a report.

The Kospi in Seoul lost 0.4% to 2,349.92, while Australia's S&P/ASX 200 declined 0.8% to 7,148.70.

Shares in Taiwan fell 1.4% and the SET in Bangkok lost 0.4%. Mumbai dropped 1.4%.

On Thursday, the S&P 500 fell 2.5% to 3,895.75, erasing its gains from early in the week. The tech-heavy Nasdaq composite lost 3.2% to 10,810.53 and the Dow gave back 2.2% to 33,202.22.

The Russell 2000 index slid 2.5% to 1,774.61.

The wave of selling came as central banks in Europe raised interest rates a day after the U.S. Federal Reserve hiked its key rate again, emphasizing that interest rates will need to go higher than...