By Ambar Warrick

-- Most Asian stocks fell sharply on Wednesday, with technology-heavy bourses losing the most after Federal Reserve Chair Jerome Powell warned that interest rates could go higher than expected.

Worsening sentiment towards China also weighed on regional stocks, as mixed trade data from the country and a warning on a potential escalation in Sino-U.S. tensions from China's foreign minister soured risk appetite.

China’s and indexes fell 0.7% and 0.5%, respectively, after logging steep losses in the prior session. While the country posted a record in the January-February period, a sharp drop in raised concerns over a sluggish recovery in local demand.

Among technology-heavy bourses, Hong Kong’s index slumped 2.7% and was the worst performer for the day, while South Korea’s and the index lost 1.4% and 0.6%, respectively.

Asian markets were dealt a , which tumbled on Tuesday following Powell’s remarks.

that recent strength in inflation and the jobs market was likely to see rates rise above market expectations, and also raised the prospect of a sharper hike in March.

His comments saw a majority of traders now in March, up from prior expectations for a 25-bps raise.

Treasury yields also spiked in overnight trade, further pressuring stock markets. The prospect of rising interest rates bodes poorly for Asian stocks, given that bonds offer steadier returns in such an environment at relatively less risk. This trend battered regional markets through 2022.

Focus this week is on more signals on the U.S. economy, with the Fed's due later on Wednesday and a reading on due on Friday.

Risk-heavy Southeast Asian markets also logged sharp losses, with Philippine’s and Thailand’s indexes losing 1.2% and 0.9%, respectively.

Japan’s bucked the trend, rising 0.3% as a rash of weak economic data reinforced bets that the will leave its ultra-accommodative policy largely unaltered this week.

Japan’s widened more than expected in January, while growth in also deteriorated.

India's and indexes fell 0.4% and 0.5%, respectively, in catch-up trade, with major technology stocks weighing the most.