Most Asian stocks slump as investors cautious after Wall Street tumbles on Fed rate hike fears

Most Asian stock markets drifted lower Wednesday following sharp declines on Wall Street sparked by investor anxiety about a looming U.S. interest rate hike.

KEEPING SCORE: Japan's Nikkei 225 gained 0.6 percent to 18,783.93, getting some relief from the prevailing trend as the dollar strengthened against the yen. South Korea's Kospi lost 0.1 percent to 1,983.50 and Hong Kong's Hang Seng slipped 0.4 percent to 23,797.92. The Shanghai Composite Index in mainland China swung into the red in afternoon trading, losing 0.2 percent to 3,279.96, after the release of disappointing economic data. Australia's S&P/ASX 200 ended 0.5 percent lower at 5,793.20. Benchmarks in Southeast Asia declined.

FED FEARS: The prospect that the Federal Reserve will soon raise interest rates for the first time in nine years is unsettling investors. Those odds got a boost after recent data revealed a strengthening job market, most recently with a government report Tuesday that found number of U.S. job postings in January was the highest in 14 years. At the same time, central banks in Europe, Japan, Australia and elsewhere are moving in the opposite direction by bringing down borrowing costs to jumpstart their stagnating economies. Low interest rates and other monetary stimulus have supported stocks for several years but a rate hike from the Fed will foreshadow a return to more levels for credit costs.

THE QUOTE: "Markets are positioning for the possibility of higher interest rates and many world stock markets go into this adjustment from a starting point of relatively high ... values, meaning making them vulnerable to a pull back," Ric Spooner, chief market analyst at CMC in Sydney, wrote in a commentary.

CHINA FOCUS: Investors were examining the latest batch of monthly economic data on China for the latest clues on the state of the world's No. 2 economy. Industrial output for January and February rose 6.8 percent, according to the official Xinhua news agency. The number was less than analysts expected. Retail sales and fixed-asset investment also disappointed. China's economy is expected to slow further after growing 7.4 percent last year, the lowest growth rate in nearly a quarter-century. The government issues the figures for both months together to smooth out distortions from Lunar New Year, which can fall in either month.

WALL STREET: U.S stocks posted big declines Tuesday. The Dow Jones Industrial Average sank 332.78 points, or 1.9 percent, to 17,662.94. The S&P 500 fell 35.27 points, or 1.7 percent, to end at 2,044.16. The Nasdaq composite lost 82.64 points, or 1.7 percent, to 4,859.79.

ENERGY: Benchmark U.S. crude rose, climbing 63 cents to $48.92 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.71 to close at $48.29 a barrel on Tuesday. Brent crude, a benchmark for international oils used by many U.S. refineries, rose 31 cents to $57.18 in London.

CURRENCIES: The dollar strengthened to 121.29 yen from 120.99 yen in the previous session. The euro weakened to $1.0690 from $1.0701.