FALLOUT FROM RISING RATES : Asian Stocks Respond in Kind to Dow’s Slide : Securities: Analysts call it a knee-jerk reaction to the 96-point plunge. Some fear a global economic slowdown.

Asian stock markets fell in early trading today, the first day of activity after Friday’s 96.24-point drop in the Dow Jones Industrial Average.

Analysts said the selloff was mostly a knee-jerk reaction to the American market’s slide, but that investors were also worried that the U.S. Federal Reserve’s shift to tighter credit could slow global economic growth--which would affect booming Asian export economies.

New Zealand’s key stock index fell 47.74 points to 2,365.50, a 2% loss, though brokers said there was no panic selling.

In midday trading today, however, many Southeast Asian markets were faring much worse:

* Hong Kong’s Hang Seng index was off 728.24 points, or 6%, to 11,429.33.

* In Kuala Lumpur, Malaysia, the KLSE composite index was down 4.5%, off 51.69 points to 1,095.63.

* The Bangkok market was hit by a selling mania, as the SET index fell 103.48 points, or 7.2%, to 1,340.33.

* In Seoul, South Korea, the main index was off 22.20 points, or 2.4%, to 920.40 at midday.

In Tokyo, meanwhile, the Nikkei index was off 227.02 points, or 1.1%, to 20,074.41 at midday, a relatively muted response to the American market’s Friday turmoil.

However, experts noted that the Tokyo market is already the world’s most depressed major market, and thus may not be at as much risk of loss as many smaller, high-flying Asian markets.

Still, while market declines of 2% or more are significant by U.S. standards, many smaller Asian markets are by nature volatile and often rise or fall by 2% or more on a daily basis.

Traders in Europe were also expecting large declines today.

The dollar, meanwhile, was trading at 108.90 yen in Tokyo early today, down slightly from Friday’s 109.25 close in New York.

The Dow’s 2.4% tumble Friday came after the Federal Reserve, acting to head off inflation as the economy expands, bumped short-term interest rates by raising the federal funds rate--the rate banks charge each other for overnight loans--to 3.25% from 3%.

Although the increase was tiny, the move was important because it is the first such action in five years by the Fed. Some analysts are seeing it as a possible precursor to further tightening.

Indeed, Treasury Secretary Lloyd Bentsen, speaking on NBC’s “Meet the Press” Sunday, said it is possible the Fed may raise rates again, and the Clinton Administration won’t try to dissuade it from doing so. “That’s always a possibility,” Bentsen said of another Fed hike. Bentsen declared that inflation is under control, predicting that consumer prices will rise about 3% this year, up a shade from last year’s increase.

Bloomberg Business News contributed to this report.