LONDON (CNNfn) - Asia's leading markets closed lower Thursday, as expectations of an increase in U.S. interest rates that leveled Wall Street stocks a day earlier spilled over into the Pacific Rim.
Hong Kong's benchmark Hang Seng index dropped 263.40 points, or 1.7 percent, to 15,314.07 amid losses for key technology stocks. In Singapore, the Straits Times index fell 24.43 points, or 1.1 percent, to 2,120.80.
Australia's S&P/ASX 200 index fell 1.7 percent, with media giant News Corp. dropping 5.5 percent, while the KOSPI index in South Korea slipped 0.2 percent. Tokyo's stock market, Asia's largest, is closed until next Monday for Japan's "Golden Week" holiday.
Taipei's Taiwan Weighted Index edged up 0.1 percent after Finance Minister Paul Chiu sought to bolster investor confidence, pledging to take "necessary" measures to cope with any declines in the stock market. The index had slumped recently amid concerns about Taiwan's relationship with China.
Among Asia's smaller markets, the SET index in Bangkok rose 0.4 percent and Jakarta's JSX index rose 0.7 percent, but Manila's PHS Composite slipped 2.5 percent.
Stocks on Wall Street retreated Wednesday. The Nasdaq composite fell nearly 2.1 percent, extending its two-day drop to 6 percent. The Dow Jones industrial average shed 250.99 points, or 2.3 percent, to 10,480.13, while the broader S&P 500 lost 31.19 to 1,415.10. 
In the currency market Thursday, the U.S. dollar rose to ¥109.41 from ¥108.97 in New York trading late Wednesday. Traders said there were growing expectations the U.S. Federal Reserve would boost its key interest rate by half a percentage point when it meets on May 16, saying that such a rate hike could spur similar moves across the Pacific Rim.
The greenback continued to shine against the ailing euro, with the European currency trading at $0.8918, near its record low.
China Telecom drags Hang Seng
Among top Hong Kong shares, Chinese mobile phone operator and Hang Seng index heavyweight China Telecom shed 2.9 percent, while telephone operator Cable & Wireless HKT fell 2.2 percent and Internet player Pacific Century CyberWorks lost 2.9 percent.
Conglomerate Hutchison Whampoa dropped 2.3 percent, following a warning Wednesday by credit rating agency Standard & Poor's that it might lower its rating of Hutchison's debt.
The prospect of higher interest rates punctured shares of Hong Kong property companies. Henderson Land fell 2.2 percent and Sun Hung Kai Properties slipped 4.1 percent.
But banking stocks, often a casualty of higher interest-rates, held up well. Bank of East Asia rose 0.6 percent and Hang Seng Bank rose 0.4 percent, although HSBC Holdings dropped 0.3 percent.
In Singapore, Southeast Asia's biggest bank, DBS Group, fell 3.8 percent.
Venture Manufacturing, a contract manufacturer of electronics, shed 3.7 percent.
In Sydney, National Australia Bank dropped 1.2 percent even after Australia's largest bank reported a 13 percent rise in first-half profit to A$1.6 billion, at the high end of the range of analysts' expectations. 
-- from staff and wire reports
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