Hawkish Fed floors global markets

Bangkok: Asian shares skidded on Thursday after a retreat on Wall Street as markets registered their dismay over the Federal Reserve's warning that still higher interest rates are in store following its latest increase. Oil prices fell while US futures edged higher.

Japan reported its trade deficit in November surged to over 2 trillion yen ($15 billion) as higher costs for oil and a weak yen combined to push imports higher.

It was the 16th straight month of red ink and a record high for the month of November. Tokyo's Nikkei 225 lost 0.3 to 28,058.42 and the Hang Seng in Hong Kong sank 1.1 per cent to 19,449.15.

The Kospi in Seoul gave up 1.1 per cent to 2,372.78. The Shanghai Composite index fell 0.3 per cent to 3,167.73 and Australia's S and P/ASX 200 shed 0.6per cent to 7,208.80.

Shares fell in Taiwan and Bangkok but rose in Mumbai. As expected, the central bank raised its key short-term rate by 0.50 percentage points on Wednesday. It was its seventh hike this year. The Fed also said it expects rates to be higher over the coming few years than it had anticipated. Recent signs that inflation has eased had stoked optimism that the Fed might signal the possibility of rate cuts in the second half of next year.