SHARES retreated in Asia on Friday, Dec. 2, 2022, after a mixed day on Wall Street as optimism over signs the Federal Reserve may temper its aggressive interest rate hikes was replaced by worries the economy might be headed for a recession.

A U.S. measure of inflation that’s closely watched by the Federal Reserve eased in October, raising questions over the central bank’s determination to keep raising interest rates to tame price increases.

And activity in American manufacturing contracted in November for the first time since May 2020, according to the Institute for Supply Management. The report also showed that prices are falling.

Slower growth due to tighter monetary policies has slowed new orders and order backlogs, “which saw manufacturing conditions contracting for the first time since June 2020,” Jun Rong Yeap of IG said in a report.

That may suggest that with “inflation risks behind us now, ‘bad news’ in economic data may not be ‘good news’ for markets as recession fears could be brewing,” he said.

Signs of weakening trade, especially for export-dependent economies in Asia, have deepened worries over slowing growth in China and its implications for the global economy.

Tokyo’s Nikkei 225 index lost 1.7 percent to 27,750.22 and the Hang Seng in Hong Kong declined 0.7 percent to 18,612.49. The Kospi in Seoul shed 1.4 percent to 2,445.86.

The Shanghai Composite index gave up 0.3 percent to 3,154.74 and Australia’s S&P/ASX 200 slipped 0.7 percent to 7,305.70. Bangkok’s SET index lost 0.4 percent and the Sensex in Mumbai was down 0.6 percent. (AP)