Asian Stocks Down over Concerns of Slowing Growth By

© Reuters.

By Zhang Mengying

– Asia Pacific stocks were up on Mi's foreign exchangeWednesday morning as markets are worried about whether the global economy can weather interest rate hikes.

Japan's Nikkei 225 fell 1.11% by 10:16 PM ET (2:16 AM GMT).

South Korea’s KOSPI fell 1.61%.

In Australia, the ASX 200 dived 1.28%.

Hong Kong’s Hang Seng was down 1.16%.

China’s Shanghai Composite was down 0.38% while the Shenzhen Component was down 0.32%. China took a surprise move Tuesday to cut quarantine times for inbound travelers to seven days from 14 days in centralized quarantine facilities. The step lifted market hopes of China’s shift to another COVID-19 strategy which could cost less economic damage.

The S&P 500 sank while the tech-heavy Nasdaq 100 dived over. Treasuries were steady, leaving the 10-year yield at 3.18%. Oil prices pushed past $112 a barrel on tight supply.

Investors are skeptical that the U.S. Federal Reserve could raise interest rates sharply while avoiding an economic downturn.

“The Fed still believes it can thread that very fine line between tightening financial conditions while not hurting the economy too much,” State Street Corp. macro strategist Emily Weis told Bloomberg.

“We’re still not sure they’re going to be able to pull that off. That’s what we’ve seen reflected in the markets over the last month or so.”

New York Fed President John Williams and San Francisco’s Mary Daly said that they had to cool inflation but insisted that a soft landing was still possible.

In Europe, central bank President Christine Lagarde affirmed plans for an initial quarter-point rate increase in July.

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