WORLD NEWS | Asian markets follow Wall Street lower on gloomy outlook

BEIJING, Dec. 20 (AP) Asian stocks extended losses on Tuesday as central banks raised interest rates to curb inflation and global growth slowed.

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

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Markets were slipping after the U.S. Federal Reserve raised its key lending rate last week and the European Central Bank signaled further rate hikes ahead. That fueled investor concerns that central bankers may be willing to trigger a recession to fight inflation that is at multi-decade highs.

Wall Street fell for a fifth straight day on Monday after the Federal Reserve said last week that interest rates may have to stay high for longer than previously forecast.

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“Market tone reflects an uncertain global economic outlook,” ActivTrades’ Anderson Alves said in a note.

The Shanghai Composite Index fell 0.6 percent to 3,087.32 after the World Bank cut its forecast for China’s economic growth this year to 2.7 percent from 4.3 percent in June. The bank cited repeated closures of major cities to combat the COVID-19 outbreak.

Tokyo’s Nikkei 225 fell 2.4% to 26,575.04 after the Bank of Japan avoided joining the Federal Reserve and other central banks in raising interest rates, widening the range within which government bond yields are allowed to move. That would push market rates slightly higher.

Hong Kong’s Hang Seng fell 1.4 percent to 19,089.96 and Seoul’s Kospi lost 0.7 percent to 2,334.05.

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

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

The Dow Jones Industrial Average fell 0.5% to 32,757.54. The Nasdaq Composite fell 1.5 percent to 10,546.03.

Communication services stocks, technology companies and retailers fell. Disney fell 4.8 percent, Microsoft fell 1.7 percent and Home Depot fell 1.9 percent.

Facebook parent shares fell 4.1% after the European Union accused the company of distorting competition in the online classifieds business and violating antitrust rules.

The Fed last week raised short-term lending rates by half a percentage point, its seventh increase this year.

The federal funds rate is at a 15-year high of 4.25% to 4.5%. The Fed forecasts a range of 5% to 5.25% by the end of 2023. The forecast does not call for a rate cut until 2024.

Investors look to this week’s U.S. economic report for an update on the path of inflation. It has retreated from a high of 9.1% in June, but remained at 7.1% in November.

The National Association of Realtors will release home sales for November on Wednesday. Also on Wednesday, the Conference Board released its consumer sentiment report for December.

On Friday, the government will release consumer spending for November. The report is viewed by the Federal Reserve as a barometer of inflation.

In energy markets, benchmark U.S. crude rose 30 cents to $75.68 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international oil trades, rose 20 cents to $80 a barrel in London.

The dollar fell to 133.29 yen from 136.99 yen on Monday. The euro was steady at $1.0604. (Associated Press)

(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)