TOKYO (AP) -- Global shares declined Wednesday after stocks tumbled on Wall Street as worries persist about higher interest rates and their tightening squeeze on the global economy.
France's CAC 40 slipped nearly 0.8% in early trading to 7,252.50. Germany's DAX fell 0.7% to 15,290.37. Britain's FTSE 100 dropped 0.9% to 7,902.44. The futures for the Dow Jones Industrial Average and S&P 500 edged 0.1% higher.
In Asian trading, Tokyo's benchmark Nikkei 225 dipped 1.3% to finish at 27,104.32. Australia's S&P/ASX 200 slipped 0.3% to 7,314.50. South Korea's Kospi dropped 1.7% to 2,417.68. Hong Kong's Hang Seng slipped 0.5% to 20,423.84, while the Shanghai Composite shed 0.5% to 3,291.15.
New Zealand's central bank raised its benchmark interest rate by a half-point to 4.75% to try to wrestle down inflation. The increase, which can raise the borrowing costs for consumers on everything from credit cards to mortgages, comes despite widespread economic pain from a devastating cyclone.
Higher rates hurt investment prices and raise the risk of a recession by slowing business investment and consumer spending.
U.S. employment and consumer spending have weathered higher interest rates well, but a report Tuesday showed sales of previously occupied homes slowed to their slowest pace in more than a decade. The mixed signals leave investors wondering if the Fed will ease back on rate hikes or resume a more aggressive stance.
"Amid the evolving new narrative of stronger US growth, payrolls, retail sales, and the additional Fed response required to tame the rude health of the US economy, investors are beginning to think the hawkish Fed may not have entirely run its course yet," Stephen Innes of SPI Asset Management said in a commentary.
The S&P 500 fell 2% on Tuesday in its sharpest drop since the market was selling off in December. The Dow industrials lost 2.1%, while the Nasdaq composite sank 2.5%.
Bond yields have shot higher this month as Wall Street ups its forecasts for how high the Federal Reserve will take short-term interest rates in its efforts to stamp out inflation. The Fed has already pulled its key overnight rate up to a range of 4.50% to 4.75%, up from basically zero at the start of last year.
The worry is that the Fed could ratchet up its forecasts for rates further next month when it releases its latest projections for the economy. Besides showing more strength in the job market and retail sales than expected, recent reports have also suggested inflation is not cooling as quickly and as smoothly as hoped. Investors are also pushing back their forecasts for when the first cut to rates could happen.
In other trading Wednesday, benchmark U.S. crude lost $1.00 to $75.36 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international pricing standard, fell 82 cents to $81.95 a barrel.
The U.S. dollar fell to 134.95 Japanese yen from 134.98 yen. The euro slipped to $1.0648 from $1.0653.