Asian stocks slump on Fed official's rate rise comments

HONG KONG (AP) - Asian stocks tumbled Monday, as investors reacted to comments last week from a Fed official, who caught markets off guard by saying that interest rates could rise soon. Questions over the health of presidential candidate Hillary Clinton also cast a shadow after she was diagnosed with pneumonia during the weekend.

KEEPING SCORE: Japan's benchmark Nikkei 225 index lost 1.5 percent to 16,707.73 and South Korea's Kospi slid 2.0 percent to 1,997.54. Hong Kong's Hang Seng shed 2.4 percent to 23,511.95 and the Shanghai Composite Index fell 1.5 percent to 3,034.34. Australia's S&P/ASX 200 sank 2.3 percent to 5,218.70.

FED FOCUS: The regional decline followed losses on Wall Street, which had its worst day in two months on Friday after investors seized on remarks by Fed Bank of Boston President Eric Rosengren. He said there's a case to be made for the U.S. central bank to raise its key interest rate sooner rather than later. That surprised Fed observers, most of who believed a hike was not on the cards until December. The Fed's next meeting is set for later this month. Ultra-low interest rates have been a key driver of an extended stock market rally.

THE QUOTE: "Friday's market adjustment to the possibility of higher rates has continued in early Asian trade," said Ric Spooner, chief analyst at CMC Markets in Sydney. "The balance of risks suggests global economies would now be best suited by a scenario where the U.S. Fed cautiously leads world central banks out of the post (Global Financial Crisis) monetary easing cycle."

US VOTE: Clinton's abrupt departure from a 9/11 anniversary ceremony on Sunday and her medical diagnosis, less than two months before election day, added an extra element of uncertainty to already fragile global sentiment. In a statement, Clinton's doctor said the former secretary of state had become overheated and dehydrated at the event in lower Manhattan.

WALL STREET: The Dow Jones Industrial average lost 2.1 percent to 18,085.45. The Standard & Poor's 500 index slid 2.5 percent to 2,127.81. The Nasdaq composite index lost 2.5 percent to 5,125.91.

ENERGY: Oil futures extended losses. U.S. benchmark crude fell 78 cents to $45.10 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.74, or 3.7 percent, to close at $45.88 a barrel on Friday. Brent crude, used to price international oils, slid 76 cents to $47.25 a barrel.

CURRENCIES: The dollar slipped to 102.59 yen from 102.69 in late trading Friday. The euro climbed to $1.1242 from $1.1232.

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