Asian stocks slide for 3rd day on economic growth fears

Asian stocks fell for a third day on Friday after more rate hikes by the Federal Reserve and other central banks to control persistent inflation spurred fears of a possible global recession.

Beijing:Asian stocks fell for a third day on Friday after more rate hikes by the Federal Reserve and other central banks to control persistent inflation spurred fears of a possible global recession. Shanghai, Hong Kong, Seoul and Sydney declined. Oil prices edged lower. Japanese markets were closed for a holiday. Wall Street's benchmark S and P 500 index fell on Thursday for the third day after rate hikes by central banks in Britain, Switzerland, Turkey and the Philippines.

The Fed hiked its key rate on Wednesday for a fifth time this year and indicated more rises were on the way. Global equities are struggling as the world anticipates surging rates will trigger a much sooner and possibly severe global recession, Edward Moya of Oanda said in a report. The Shanghai Composite Index lost less than 0.1 per cent to 3,107.88 and Hong Kong's Hang Seng sank 0.4 per cent to 18,064.67.

The Kospi in Seoul tumbled 1.8 per cent to 2,290.54. Sydney's S and P-ASX 200 fell 2 per cent to 6,567.30 and India's Sensex opened down 1.1 per cent at 58,467.75. New Zealand and Southeast Asian markets declined. The S and P 500 lost 0.8 per cent on Thursday to 3,757.99. The Dow Jones Industrial Average fell 0.4 per cent to 30,076.68 and the Nasdaq composite slid 1.4 per cent to 11,066.81.

Also on Friday, Vietnam's central bank raised a key lending rate by a full 1 percentage point, surprising forecasters. The State Bank of Vietnam appeared to be trying to cool inflation while also discouraging a capital outflow in search of higher interest rates abroad. Investors fear the Fed and other central banks might be willing to tolerate a painful slump in economic activity to get prices under control.

Some point to signs the US economy is cooling as support for the Fed to back off plans for more rate hikes. But chair Jerome Powell said on Wednesday the Fed will keep rates elevated for an extended time if needed to get inflation back to its 2 per cent target. US consumer inflation eased to 8.3 per cent in August from the previous month's 9.1 per cent peak.

But core inflation, which strips out volatile food and energy prices to give a clearer picture of the trend, rose to 0.6 per cent over the previous month, up from July's 0.3 per cent increase. That indicated pressure for prices to rise still was strong. The Fed on Wednesday lifted its benchmark rate, which affects many consumer and business loans, to a range of 3 per cent to 3.25 per cent.

It released a forecast showing it expects that benchmark rate to be 4.4 per cent by the year's end, a full point higher than envisioned in June. Traders also are looking ahead to quarterly financial results from big companies. In energy markets, benchmark US crude lost 25 cents to USD 83.24 per barrel in electronic trading on the New York Mercantile Exchange.

The contract rose 55 cents to USD 83.49 on Thursday. Brent crude, used to price international oils, declined 28 cents to USD 89.25 per barrel in London. It rose 63 cents the previous session to USD 90.46. The dollar fell to 142.18 yen from Thursday's 142.49 yen. The euro declined to 98.23 cents from 98.31 cents. (AP)