(AP) -- World shares slipped on Wednesday, with Hong Kong's benchmark down more than 3%, even as Beijing announced it was scaling back its "zero-COVID" policies.
U.S. futures and oil prices also dropped.
The declines followed a retreat on Wall Street, driven by fears the Federal Reserve will need to keep the brakes on the U.S. economy to get inflation under control, risking a sharp recession.
Germany's DAX fell 0.5% to 14,265.80 and the CAC 40 in Paris declined 0.6% to 6650.32. Britain's FTSE 100 lost 0.2% to 7,504.52. The future for the S&P 500 slipped 0.3% and that for the Dow industrials was 0.2% lower.
In Asian trading, the Hang Seng index in Hong Kong fell 3.2% to 18,814.82. The Shanghai Composite index was down 0.4% at 3,199.62.
The announcement by China's National Health Commission rolled back rules on isolating people with COVID-19 and dropped virus test requirements for some public places.
Experts say it might be at least mid-2023 before controls that disrupt travel, trade and industry can be lifted completely, but world markets have gyrated on speculation that major changes might be coming, helping return the world's second-largest economy to a post-pandemic "normal."
Tokyo's Nikkei 225 index slipped 0.7% to 27,686.40 and the Kospi in Seoul gave up 0.4% to 2,382.81. The Shanghai Composite lost 0.4% to 3,199.62, while Australia's S&P/ASX 200 dropped 0.9% to 7,229.40.
Shares also fell in Mumbai and Bangkok.
China reported its imports and exports fell in November as global demand weakened and anti-virus controls weighed on the second-largest economy.
Customs data showed exports sank 9% from a year earlier, worsening from October's 0.9% decline. Imports fell 10.9%, down from the previous month's 0.7% retreat. Chinese trade had been forecast to weaken as global demand cooled following interest rate hikes by the Federal Reserve and central banks in Europe and Asia to rein in surging inflation.
On Tuesday, the S&P 500 fell 1.4%, its fourth straight loss, and the Dow Jones Industrial Average lost 1%. The Russell 2000 slipped 1.5%.
Small company stocks also fell, pulling the Russell 2000 index 1.5% lower. The major indexes are on pace for a weekly loss after posting two straight weekly gains.
Stocks pulled back Monday as stronger-than-expected readings on the economy raised worries that the Fed has a ways to go in getting inflation under control. The Fed is doing that by intentionally slowing the economy with higher interest rates.
Investors are closely watching economic data and company announcements to get a better sense of how the economy is handling stubbornly hot inflation. They are also trying to determine whether inflation is easing at a pace that will allow the Fed to ease up on interest rate increases. The Fed's policy risks hitting the brakes on the economy too hard and sending it into a recession.
The Fed is meeting next week and is expected to raise interest rates by a half-percentage point. It has raised its benchmark rate six times since March, driving it to a range of 3.75% to 4%, the highest in 15 years. Wall Street expects the benchmark rate to reach a peak range of 5% to 5.25% by the middle of 2023.
Wall Street will get a weekly update on unemployment claims on Thursday. The job market has been one of the stronger pockets in the economy.
On Friday, the government will release its November report on producer prices. That will give investors more insight into how inflation is impacting businesses.
The University of Michigan will release its December survey on consumer sentiment on Friday.
In other trading Wednesday, U.S. benchmark crude oil gave up 70 cents to $73.54 per barrel in electronic trading on the New York Mercantile Exchange.
Brent crude oil, the international standard for pricing, dropped 66 cents to $78.70 per barrel.
The dollar rose to 137.44 Japanese yen from 136.94 yen. The euro rose to $1.0501 from $1.0468.