Asian equities decline on a hawkish Fed forecast, while China worries continue.

The technology sector was negatively impacted by the likelihood of increased U.S. rates on Tuesday, while continued worries over a slowdown in China's economy also caused investors to be cautious of regional markets.

Regional equities were still in turmoil as a result of the Federal Reserve's hawkish signals, which included statements that interest rates may rise further this year and would likely stay higher for longer.

Neel Kashkari, the president of the Minneapolis Fed, made remarks overnight that fueled these worries. According to Kashkari, there will likely be one more rate increase this year, and rates must stay higher to combat both strong inflation and a tight labour market.

In recent sessions, all three of China's indices had suffered significant losses due to worries over a further collapse of the country's real estate sector.

Tuesday saw a 5% decline for troubled developer China Evergrande, widening losses after it announced it will be unable to issue fresh debt owing to a government inquiry into one of its businesses.

This increased worries of more scrutiny for China's enormous real estate sector, which is already struggling with a three-year liquidity crisis.

In response to Wall Street's disappointing lead-in, Asian markets also declined. After the Fed's hawkish remarks, rising Treasury rates created a bleak prognosis for equities as returns on debt and less risky alternatives rose.

Given that U.S. rates are expected to stay near 20-year highs, this trade is likely to put more pressure on Asian markets in the upcoming year.

(Sources: investing.com, reuters.com)