Amid recession fears, stocks and oil drop and dollar gains

Investors are also keeping a close eye on London, after new finance minister Kwasi Kwarteng’s tax-cutting mini-budget last week sent shock waves through markets, pushing the pound to a record low and leading to dire warnings for Britain’s economy.

While Asia saw small gains Tuesday, New York and Europe ended mostly in the red again, with Wall Street jolted by data showing a surprise improvement in US consumer confidence — likely because of a dip in petrol prices — and a jump in home sales.

The figures pointed to resilience in the world’s top economy despite three successive bumper Federal Reserve rate hikes — and expectations for another in November — as it tries to tame four-decade-high inflation.

Several Fed officials have lined up this week to reassert their determination to keep hiking until prices are brought under control, even at the cost of a recession.

Observers are now betting that borrowing costs will top out at around 4.75 percent next year, and some policymakers have suggested they could remain elevated for some time.

The prospect of such tight monetary policy has battered equities, as US 10-year Treasury yields — a gauge of future rates — hit four percent for the first time since 2010.

The Dow and S&P 500 ended down Tuesday, though the Nasdaq enjoyed a slight uptick.

Asia resumed its downtrend Wednesday, with Hong Kong down more than three percent, while Seoul, Taipei and Manila sank more than two percent. Tokyo, Shanghai, Singapore were off more than one percent.

There were also losses in Sydney, Wellington and Mumbai.

But former Russian leader Dmitry Medvedev — an ally of President Vladimir Putin and now deputy chairman of the country’s security council — issued a stark warning that Moscow was ready to act decisively.

“I want to remind you — the deaf who hear only themselves: Russia has the right to use nuclear weapons if necessary,” he said on social media.

On crude markets both main contracts were down more than one percent on recession worries and as Bloomberg quoted sources as saying that US inventories increased more than four million barrels last week.

The drop comes despite a report that Moscow is calling on OPEC and other major groups to slash output by a million barrels a day when they meet next week.

– Key figures at around 0720 GMT –

Tokyo – Nikkei 225: DOWN 1.5 percent at 26,173.98 (close)

Hong Kong – Hang Seng Index: DOWN 3.6 percent at 17,215.07

Shanghai – Composite: DOWN 1.6 percent at 3,045.07 (close)

London – FTSE 100: DOWN 0.8 percent at 6,931.30

Pound/dollar: DOWN at $1.0671 from $1.0730 on Tuesday

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