Stock markets in Asia joined Wall Street's sell-off yesterday after the United States central bank refused to signal it was done raising rates amid concerns over slowing growth.

The US central bank raised the target range for its benchmark funds rate by 25 basis points to 2.25 per cent to 2.5 per cent - its fourth increase this year. Two hikes are projected for next year, while markets had hoped for none.

This sent a chill across the markets as stocks in Japan fell 2.84 per cent, while those in Hong Kong and South Korea shed around 1 per cent. The Straits Times Index closed down 0.26 per cent.

Local interest rates hit a one-year high yesterday, with the three-month Singapore interbank offered rate at 1.77168 per cent.

The US dollar erased earlier gains yesterday against the Singdollar to 1.3679.

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