Asian stocks fall after Fed discusses cut in US stimulus

BEIJING (AP) — Asian stock markets fell Thursday after the Federal Reserve talked about possibly reducing U.S. economic stimulus and Japanese officials prepared to declare a coronavirus state of emergency during the Olympics due to a surge in infections.

Market benchmarks in Shanghai, Tokyo, Hong Kong and Seoul retreated. Sydney gained.

Also Thursday, South Korea reported a one-day record increase of 1,275 new coronavirus infections, adding to the region's anxiety about disease risks.

Overnight, Wall Street closed at a new high, propelled by gains for technology, industrial and health care stocks.

Minutes of the Federal Reserve's latest meeting in June gave an upbeat outlook for a U.S. economy recovery and showed board members discussed how and when they might reduce monthly bond purchases that inject money into the financial system.

“With the initial heavy lifting from economic reopening mostly factored in, the pace of reduction in unemployment rate ahead carries some uncertainty,” said Yeap Jun Rong of IG in a report. “The Fed minutes reinforces that much awaits to be seen in the data ahead to guide policies pullback."

The Shanghai Composite Index lost 0.8% to 3,526.07 after the Chinese Cabinet announced it will free up more money for lending by reducing the amount of deposits banks are required to hold in reserve.

The Hang Seng in Hong Kong fell 2.8% to 27,193.52, hurt by declines for Chinese tech stocks.

They have been hit by increased enforcement of anti-monopoly and other rules including an order to ride-hailing service Didi to stop taking on new users while it overhauls how it handles customer data. Hong Kong-traded shares of e-commerce giant Alibaba Group lost 2.3% and entertainment and social media operator Tencent Holding Ltd. slid 3%.

The Nikkei 225 in...