Asian stocks slump after Fed says US rates will rise 'soon'

Asian stock markets have tumbled by unusually wide margins after the Federal Reserve indicated it plans to start raising interest rates soon to cool inflation

BEIJING -- Asian stock markets tumbled by unusually wide margins Thursday after the Federal Reserve indicated it plans to start raising interest rates soon to cool inflation.

Tokyo's market benchmark fell more than 3%. Hong Kong and Seoul lost more than 2%.

Wall Street's benchmark S&P 500 index lost 0.1% on Wednesday after a Fed statement said the U.S. central bank “expects it will soon be appropriate” to raise rates. Investors expect as many as four rate hikes this year, starting in March. The Fed said monthly bond purchases that push down long-term rates by injecting money into the financial system would be phased out in March.

“The Fed’s decision will reverberate globally, meaning that the era of low interest rate, ultra-low interest rate is over," said Francis Lun, CEO of Geo Securities in Hong Kong. “All the central banks will start to fight inflation instead of trying to stimulate the economy.”