Asian stocks follow Wall St down after Fed inflation report

BEIJING (AP) — Asian stock markets followed Wall Street lower Thursday after the Federal Reserve said U.S. inflation is too high, suggesting support for more aggressive interest rate hikes.

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

Wall Street’s benchmark S&P 500 index lost 0.7% on Wednesday, ending a three-day series of rises, after notes from the Fed’s July 26-27 board meeting showed members thought inflation still is “unacceptably high” despite signs U.S. economic growth is weakening. It said the board saw “little evidence” inflation pressures are subsiding.

Investors worry aggressive rate hikes by the Fed and central banks in Europe and Asia to tame inflation that is running at multi-decade highs might derail global economic growth.

The Fed notes raised “the prospects of further tightening” even if the pace of hikes slows, while other investors see possible “excessive tightening dragging growth,” said Venkateswaran Lavanya of Mizuho Bank in a report.

The Shanghai Composite Index lost 0.5% to 3,276.62 and the Nikkei 225 in Tokyo sank 0.9% to 28,967.91. The Hang Seng in Hong Kong shed 0.5% to 19,821.28.

The Kospi in Seoul gave up 0.4% to 2,507.31 and Sydney’s S&P-ASX 200 retreated 0.3% to 7,109.20.

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