Hong Kong (CNN Business)Hong Kong stocks hit their lowest level in more than a decade Thursday and other Asian markets also fell after the US Federal Reserve raised rates by 75 basis points and forecast even more hikes ahead, fueling concerns about a recession.

The Hang Seng Index (HSI) fell as much as 2.6%, breaking below 18,000 points, before recovering slightly. It ended down 1.6% at 18,148, its lowest closing level since December 2011. Australia’s S&P/ASX 200 index fell 1.6%, while Japan’s Nikkei 225 (N225) and South Korea’s Kospi both dropped 0.6%. China’s Shanghai Composite Index (SHCOMP) slipped 0.3%.European markets also fell in early trading. London’s FTSE 100 (UKX) index was down about 0.3%, while Germany’s DAX (DAX)and France’s CAC40 (CAC40) both shed about 0.7%. US stock futures were little changed. The falls came after the Federal Reserve on Wednesday approved a third consecutive 75-basis-point hike in an aggressive move to tackle white-hot inflation that has been plaguing the US economy.The Exchange Square Complex, which houses the Hong Kong Stock Exchange, in Hong Kong, China, on Wednesday, July 13, 2022. The Exchange Square Complex, which houses the Hong Kong Stock Exchange, in Hong Kong, China, on Wednesday, July 13, 2022. The Exchange Square Complex, which houses the Hong Kong Stock Exchange, in Hong Kong, China, on Wednesday, July 13, 2022. The supersized hike, which was unfathomable by markets just months ago, takes the US central bank’s benchmark lending rate to a new target range of 3%-3.25%. That’s the highest it has been since the global financial crisis in 2008.Read More”If you were to compare this rate hike cycle to previous rate hike cycles going back to 1983, the Fed has never raised rates this much in this short a time period,” said David Chao, global market strategist, Asia Pacific (ex-Japan) at Invesco. “It is becoming increasingly difficult for the US to avoid recession given the Fed’s ‘forceful and rapid’ rate hikes,” he added.Hong Kong ties the value of its currency to the US dollar, and in order to maintain that peg the city’s central bank also raised its base rate on Thursday by 75 basis points.The Bank of Japan, meanwhile, held short-term interest rates at minus 0.1% on Thursday, maintaining its policy of trying to stimulate the economy. The Japanese yen initially fell to 145 against the US dollar, touching a fresh 24-year low, before reversing sharply on reports of government intervention in the currency market.Biden tells the United Nations that Putin's attempts to 'extinguish' Ukraine should 'make your blood run cold'Biden tells the United Nations that Putin's attempts to 'extinguish' Ukraine should 'make your blood run cold'Biden tells the United Nations that Putin's attempts to 'extinguish' Ukraine should 'make your blood run cold'Investor sentiment in the region was hurt by a number of other factors, including rising US-China tensions over Taiwan. US Navy and Canadian warships transited the Taiwan Strait on Tuesday, just two days after President Joe Biden said US military personnel would defend Taiwan if the Chinese military were to launch an invasion of the democratic self-ruled island. “The geopolitical backdrop, the China slowdown story, the potential for energy rationing in Europe, the strong dollar, and fragile-looking domestic [US] equity and housing markets point to clear recession risks,” said ING analysts in a note on Thursday.”A more aggressive Federal Reserve rate hike profile and tighter monetary conditions will only intensify the threat,” they added.— Emi Jozuka, Junko Ogura, Kathleen Benoza in Tokyo contributed to this report.

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