Tokyo, Sep 28 (AP) Asian shares tumbled on Wednesday after a wobbly day ended with mixed results on Wall Street as markets churn over the prospect of a possible recession.

Tokyo's Nikkei 225 index sank 2.2 per cent to 25,984.51 while the Kospi in Seoul lost 2.8 per cent to 2,161.86. In Sydney, the S&P/ASX 200 gave up 0.8 per cent to 6,443.30.

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Hong Kong's Hang Seng dropped 2.1 per cent to 17,483.89 and the Shanghai Composite index declined 0.8 per cent to 3,068.59. Taiwan's benchmark dropped 2.1 per cent.

The week started off with a broad sell-off that sent the Dow Jones Industrial Average into a bear market, joining other major US indexes.

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On Tuesday, the S&P 500 slipped 0.2 per cent to 3,647.29, its sixth consecutive loss. The Dow fell 0.4 per cent to 29,134.99, while the Nasdaq composite wound up with a 0.2 per cent gain, closing at 10,829.50.

Small company stocks held up better than the broader market. The Russell 2000 added 0.4 per cent, to close at 1,662.51.

Major indexes remain in an extended slump. With just a few days left in September, stocks are heading for another losing month as markets fear that the higher interest rates being used to fight inflation could knock the economy into a recession.

The S&P 500 is down roughly 8 per cent in September and has been in a bear market since June, when it had fallen more than 20 per cent below its all-time high set on January 4. The Dow's drop on Monday put it in the same company as the benchmark index and the tech-heavy Nasdaq.

Central banks around the world have been raising interest rates in an effort to make borrowing more expensive and cool the hottest inflation in decades.

The Federal Reserve has been particularly aggressive and raised its benchmark rate, which affects many consumer and business loans, again last week. It now sits at a range of 3 per cent to 3.25 per cent. It was at virtually zero at the start of the year.

The Fed also has released a forecast suggesting its benchmark rate could be 4.4 per cent by the year's end, a full percentage point higher than it envisioned in June.

Wall Street is worried that the Fed will hit the brakes too hard on an already slowing economy and veer it into a recession. The higher interest rates have been weighing on stocks, especially pricier technology companies, which tend to look less attractive to investors as rates rise.

Energy stocks gained ground as US oil prices rose 2.3 per cent. Exxon Mobil rose 2.1 per cent.

Bond yields were mostly higher Tuesday. The yield on the 2-year Treasury, which tends to follow expectations for Federal Reserve action, fell to 4.31 per cent from 4.34 per cent late Monday.

It is trading at its highest level since 2007. The yield on the 10-year Treasury, which influences mortgage rates, rose to 3.98 per cent from 3.93 per cent.

Investors will be watching the next round of corporate earnings very closely to get a better sense of how companies are dealing with inflation. Companies will begin reporting their latest quarterly results in early October.

Consumer confidence remains strong, despite higher prices on everything from food to clothing. The latest consumer confidence report for September from The Conference Board showed that confidence was stronger than economists expected.

The government will release its weekly report on unemployment benefits on Thursday, along with an updated report on second-quarter gross domestic product. On Friday, the government will release another report on personal income and spending that will help provide more details on where and how inflation is hurting consumer spending.

In other trading Wednesday, US benchmark crude lost USD 1.15 to USD 77.35 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, used to price international oils, shed USD 1.26 to USD 83.61 per barrel in London.

The dollar fell to 144.65 Japanese yen from 144.81 yen. The euro was at 95.59 cents, down from 95.92 cents. (AP)

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)