Asian markets follow Wall St lower amid gloomy outlook

BEIJING (AP) — Asian stock markets extended their losses Tuesday amid gloom about weaker global economic growth as central banks raise interest rates to cool inflation.

Shanghai, Tokyo, Hong Kong and Sydney declined. Oil prices edged higher.

Markets are sliding after the U.S. Federal Reserve raised its key lending rate last week and the European Central Bank said more rate hikes are ahead. That fueled investor fears central bankers might be willing to cause a recession to fight inflation that is at multi-decade highs.

Wall Street declined Monday for a fifth day after the Fed said last week rates might have to stay elevated longer than previously forecast.

“The tone in markets reflects a cloudy outlook for the global economy,” said Anderson Alves of ActivTrades in a report.

The Shanghai Composite Index lost 0.6% to 3,087.32 after the World Bank cut its forecast of China's economic growth this year to 2.7% from its June outlook of 4.3%. The bank cited repeated shutdowns of major cities to fight COVID-19 outbreaks.

The Nikkei 225 in Tokyo tumbled 2.4% to 26,575.04 after Japan's central bank, which has avoided joining the Fed and other central banks in raising rates, widened the range in which it will allow government bond yields to fluctuate. That will allow market interest rates to edge higher.

The Hang Seng in Hong Kong sank 1.4% to 19,089.96 and the Kospi in Seoul lost 0.7% to 2,334.05.

Sydney's S&P-ASX 200 fell 1.5% to 7,028.40 while India's Sensex opened up 0.8% at 61,806.19. New Zealand and Southeast Asian markets retreated.

Wall Street's benchmark S&P 500 index fell 0.9% to 3,817.66. The index is down about 20% this year with less than two weeks left in 2022.

The Dow Jones Industrial Average fell 0.5% to 32,757.54. The Nasdaq composite lost 1.5% to...