Asia tracks Wall St lower as traders pause Fed-fuelled rally

HONG KONG, China — Asian equities sank Wednesday as traders take a breather from a global rally that has been fuelled by expectations the Federal Reserve will cut interest rates next month.

With few sparks to drive buying, markets took their cue from Wall Street, where the main indexes slipped after an eight-day advance, with focus on a speech Friday by central bank boss Jerome Powell at the Jackson Hole symposium in Wyoming.

After a hefty retreat at the start of the month -- caused by a weak US jobs report that fanned recession fears -- investors have rediscovered their buying mojo, with speculation rife that the Fed will begin easing monetary policy at its September meeting.

Data showing inflation easing, retail sales remaining healthy and the jobs market softening -- but not too quickly -- have reinforced a long-running view that bank officials are on course to guide the economy to a soft landing and avert a recession.

With bets now baked into a reduction, speculation is now focused on how many are in the pipeline and how big they will be, with some suggesting as much as 100 basis points before the end of the year.

Its forecast rate cut would come as central banks around the world begin easing after years of battling soaring inflation.

Sweden on Tuesday announced its second this year, while New Zealand last week moved for the first time since early 2020. The Bank of England and European Central Bank have also moved, and are eyeing more before January.

And while traders are taking a step back for now, observers are optimistic that with more rate reductions on the way, equities have further to go.

"There were no major catalysts for the retreat, but after several days of gains, taking a breather seems like a reasonable outcome," said National Australia Bank's Rodrigo Catril.

All three main indexes on Wall Street dipped, having come within distance of their record highs.

And the losses filtered through to Asia.

Hong Kong was among the big losers as tech firms took a hit, with e-commerce titan JD.com tumbling more than 11 percent after a Bloomberg report said US retail behemoth Walmart planned to unload $3.7 billion of shares in the firm at a discount.

Tokyo,