Asian stocks slumped in early trade as concerns about higher US interest rates and a global trade war prompted investors to sell risk globally.

Markets in Asia took their cue from US stocks, which suffered their sharpest one-day falls in months on Wednesday.

Japan's benchmark Nikkei 225 dropped 3.9% - on course for its biggest daily drop since March.

In China, the Shanghai Composite fell to lowest since 2014. It was 3.9% lower and the Hang Seng dropped 3.8%.

The US Federal Reserve raised rates in September as the economy grows solidly.

Higher interest rates make borrowing more expensive, slowing economic activity and hurting investor appetite for risk.

A US-led trade war against China has also made investors worried about the outlook for global growth.

Elsewhere in Asia, South Korea's benchmark Kospi index fell 3.4% and Australia's S&P/ASX 200 index fell 2.4%.

Trump attacks 'crazy' Fed

US markets have done better than expected this year, bouncing back after turmoil early in the year to set new records over the summer.

But the Federal Reserve is raising interest rates, and more is likely to come.

The Fed last month abandoned its description of its policy as "accomodative", reflecting a view that the economy is strong enough not to need the kind of stimulus it received in the after-math of the financial crisis.

Asia benefited from low interest rates globally post-crisis, as investors sought to put their money in markets offering higher returns.

The prospect of dwindling US stimulus has been compounded by a trade war between the world's two largest economy - which the IMF has warned could harm growth.

US President Donald Trump has been particularly critical of the Fed's rate rises, breaking with tradition in the US where presidents are expected to respect central bank independence.

"The Fed is making a mistake," he told reporters on Wednesday. "I think the Fed has gone crazy."

The stock market fall came ahead of America's corporate earnings season, when companies will provide updates to investors about their outlook for the rest of the year.

Source: BBC