Asian stocks follow Wall St lower before likely US rate hike

BEIJING (AP) — Asian stock markets followed Wall Street lower Wednesday as traders prepared for a possible sharp interest rate hike by the Federal Reserve to cool inflation.

Shanghai, Hong Kong and South Korea declined. Tokyo and Sydney advanced. Oil prices were little changed, staying below $100 per barrel.

Wall Street tumbled Tuesday after Walmart warned that inflation that has spiked to a four-decade high of 9.1% is hurting American consumer spending.

Investors worry aggressive action against inflation by the Fed and central banks in Europe and Asia might derail global economic growth.

The Fed is expected to announce a rate hike Wednesday of up to three-quarters of a percentage point, triple its usual margin. That would match a similar increase last month, the U.S. central bank's biggest in 28 years.

“The main risk at this stage is in fact an inflation ‘overkill’ with monetary tightening too abrupt, unnecessarily pushing up the unemployment rate,” Thomas Costerg of Pictet Wealth Management said in a report. Costerg said most economic indicators and lower commodity prices already point to slower inflation ahead.

The Shanghai Composite Index lost 0.1% to 3,274.37 while Tokyo's Nikkei 225 advanced 0.3% to 27,728.93. The Hang Seng in Hong Kong sank 1.5% to 20,590.46.

The Kospi in Seoul retreated 0.4% to 2,401.78 and Sydney's S&P-ASX 200 gained 0.1% to 6,814.00.

India's Sensex opened up 0.3% at 55,418.55. New Zealand, Bangkok and Jakarta advanced while Singapore declined.

On Wall Street, the benchmark S&P 500 index fell 1.2% to 3,921.05. The Dow Jones Industrial Average dropped 0.7% to 31,761.54. The Nasdaq composite closed 1.9% lower at 11,562.57.

Walmart slumped 7.6% after the retail giant cut its profit outlook for the second quarter and the full year late...