Asia markets track Wall Street's losses

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MUMBAI — Asian stock markets retreated Thursday after Wall Street's overnight loss, as high oil prices aggravated worries about inflation and the possibility of higher interest rates.

The Shanghai Composite Index suffered its seventh day of declines, falling 2.3 percent to 2,955.22 by midafternoon. The benchmark has dropped more than 15.4 percent since June 2.

Hong Kong's blue-chip Hang Seng Index, meanwhile, was off 1.8 percent to 22,906.47. Markets in Japan, Taiwan, India, Australia and Singapore also fell more than 2 percent.

"There's a lot of uncertainty right now," said Ben Kwong Man Bun, the chief operating officer at KGI Securities. "The market is going to need some more good news to bounce back."

Inflationary fears drove most of the declines, with investors concerned higher prices would sap consumer spending and lead central banks to hike interest rates. That could further hurt corporate profits at a time when the U.S. economy — a vital export market for Asia — is already sputtering.

Overnight in the U.S., the Federal Reserve indicated that Americans are straining under rising energy and food costs, and that Fed said the economy remains "generally weak." The Dow Jones industrial average fell more than 200 points to its lowest close since mid-March.

Oil prices eased in Asia after jumping Wednesday, but still remained near record levels. Light, sweet crude for July delivery was down $1.50 to $134.90 a barrel in electronic trading on the New York Mercantile Exchange after surging $5.07 the previous day.

In China, investors were jittery over the likelihood of further credit-tightening measures even as new figures showed the country's inflation rate dipped slightly last month to 7.7 percent.

Mainland China investors dumped financial shares. China Life Insurance shed 6.4 percent and Citic Securities was off 5.5 percent.

In Hong Kong, rising crude prices took a toll. Sinopec slid 4.5 percent, while PetroChina lost 2.71 percent. Airline Cathay Pacific pulled back almost 1.8 percent.

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