Heraldo de Madrid - Most Asian markets down as Fed prepares latest hike

The selling followed a steep drop on Wall Street fuelled by concerns that four-decade high inflation and rising borrowing costs were keeping Americans from spending, and pushing the economy towards a recession.

That was backed up by a profit warning by retail titan Walman and a closely watched consumer confidence gauge sinking for the third month in a row.

And the International Monetary Fund slashed its global growth forecasts, warning the US economy would likely shrink.

There had been hope that a recent rally across markets indicated the long-running sell-off may have come to an end, and that signs of an economic slowdown could allow the Fed to ease off its tightening by next year and start cutting rates in 2023.

But observers warned there was still a lot of volatility to come as the bank was still hiking, prices were soaring, Russia's war in Ukraine showed no sign of ending and China was still battling Covid with lockdowns.

"The Fed hasn’t even gotten to neutral yet," Jason England, of Janus Henderson Investors, told Bloomberg Television.

"For them to start easing already or for them to start seeing eases priced in is, I think, a little premature."

All eyes are now on the Fed meeting, which concludes Wednesday and is followed Thursday by second-quarter economic growth figures.

While officials are widely tipped to announce a second successive three-quarter point increase, the main focus will be their outlook for the economy and clues about future moves as it begins to falter.

"Markets are pricing at a slower pace of tightening before the Fed pivots to an easing stance in 2023," said SPI Asset Management's Stephen Innes.

"However, Fed Chair Jerome Powell has been pushing back against a recession outcome while highlighting an outsized focus on combating inflation."

After a drop on Wall Street, most of Asia gave back a large chunk of Tuesday's rally.

Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei, Manila and Jakarta were all in the red, though Tokyo, Jakarta and Wellington eked out gains.

But US futures rallied after healthy earnings releases from tech titans, including Microsoft and Alphabet, soothed some worries about the consumer.

Oil prices fluctuated as recession worries were offset by data showing a big drop in US stockpiles, which pointed to strong demand at a time when supplies remain weak.

- Key figures at around 0230 GMT -

Tokyo - Nikkei 225: UP 0.1 percent at 27,692.89 (break)

Hong Kong - Hang Seng Index: DOWN 1.2 percent at 20,659.18

Shanghai - Composite: DOWN 0.3 percent at 3,268.76

Euro/dollar: UP at $1.0146 from $1.0126 Tuesday

Pound/dollar: UP at $1.2051 from $1.2030

Euro/pound: UP at 84.19 pence from 84.09 pence

Dollar/yen: UP at 137.02 yen from 136.95 yen

West Texas Intermediate: FLAT percent at $94.96 per barrel

Brent North Sea crude: DOWN 0.2 percent at $104.22 per barrel

New York - Dow: DOWN 0.7 percent at 31,761.54 (close)

London - FTSE 100: FLAT at 7,306.28 (close)

H.Roldan--HdM