By Ambar Warrick 

-- Asian stock markets fell on Wednesday as investors sought more clarity over a potential Russian missile strike on Poland, although expectations that the Federal Reserve will raise interest rates at a slower pace helped temper losses.

Hong Kong stocks were the worst performers for the day, with the index down 1.1% as investors locked in a stellar three-day gaining spree. Recent gains saw the Hang Seng come within spitting distance of confirming a bull market run from recent lows.

China’s bluechip index fell 0.8%, while the lost 0.4%. Weak economic data from the country continued to trickle in as it struggled with a fresh wave of COVID-19 infections, with a reading on Wednesday showing that Chinese marked their worst fall in seven years in October. 

Still, Chinese stocks rallied in recent sessions amid some optimism over the scaling back of COVID-linked restrictions. 

Risk-driven markets slipped on Wednesday after a in eastern Poland. The strike, if linked to Russia, would mark the first time since the Russian invasion of Ukraine that Moscow attacked a member of the North Atlantic Treaty Organization (NATO).

The move could also potentially mark an escalation in the Russia-Ukraine conflict, especially with NATO intervention. But initial comments from Moscow and Washington suggest that such a scenario may not play out. 

Asian markets had plummeted earlier this year as Russia’s invasion of Ukraine triggered economic disruptions across the globe, with traders now fearing more such disruptions.

The and benefited from safe haven demand on Wednesday. 

Some Asian markets still rose for the day. India’s bluechip index rose 0.1%, as softer-than-expected this week ratcheted up hopes that the Reserve Bank of India will raise interest rates at a slower pace in the coming months. India’s strong economic prospects this year have also seen the Nifty 50 outperform its Asian peers in recent months.

Australia’s fell relatively lesser than its peers as data showed stronger-than-expected in the third quarter, reflecting some resilience in the Australian economy. 

Broader losses in Asian markets were somewhat tempered by data showing U.S. hit a 14-month low in October. The reading pushed up expectations that the Federal Reserve will raise rates at a - a scenario that is positive for risk-driven markets.