HONG KONG: Fears of a recession caused by sharp interest rate hikes aimed at fighting soaring inflation sent Asian and European markets tumbling Wednesday, tracking a sharp drop on Wall Street.
The hefty selling came after more than a week of gains across the world caused by hopes that any signs of contraction could give central banks room to ease up on their pace of monetary tightening.
Wednesday's selling came after New York's three main indexes tanked in reaction to data showing confidence among US consumers -- who are a crucial driver of the world's top economy -- had fallen to its lowest level in more than a year.
The mood-sapping reading was partly driven by a feeling inflation would persist, suggesting consumers are not sure the Federal Reserve's aggressive efforts to tame inflation will work.
The news overshadowed a surprise move by China to slash the quarantine period for incoming travellers, raising hopes for further relaxations that can allow the country's giant economy to recover more quickly.
Hong Kong led losses as tech firms took a beating, while Tokyo, Shanghai, Sydney, Seoul, Mumbai, Manila, Taipei, Jakarta, Bangkok and Wellington were also well down.
London, Paris and Frankfurt all fell in the morning.
