By YURI KAGEYAMA
TOKYO (`) – Hong Kong’s equity benchmark, the Hang Seng index, rose 9% on Wednesday after a top Chinese official said Beijing would provide more support to the slowing Chinese economy.
The rise came as a respite from recent strong selling by Chinese tech companies and other drags that had pushed the Hang Seng to a six-year low.
Officials at a cabinet meeting in Beijing promised to “revive the economy” with “supportive measures” for the stricken properties and other steps, the official Xinhua News Agency reported.
At the meeting, chaired by Vice Premier Liu He, President Xi Jinping’s top economic adviser, cabinet officials urged government agencies to issue other policies that are “favorable to the market,” Xinhua said.
It also said talks between Chinese and US regulators to settle a dispute over rules for foreign companies listed in US markets had made progress.
The Hang Seng rose 9% to 20,079.61. The Shanghai Composite Index rose 3.5% to 3,170.71.
Shares of e-commerce giant Alibaba Group Holding surged 23.6%. Tencent Holdings, operator of the popular WeChat news service, rose 23% and live streaming site Kuaishou Technology rose 31.4%.
Various factors contributed to the rally, including comments by Ukrainian President Volodymyr Zelenskyy that there was still reason to be optimistic that the negotiations could still lead to an agreement with the Russian government.
Still, Russia escalated its bombing of the Ukrainian capital and launched fresh attacks on the port city of Mariupol, making bloody advances on the ground on Wednesday as Zelenskyy prepared to appeal directly for more help in a rare speech by a foreign leader to the US Congress .
Japan’s benchmark Nikkei 225 rose 1.6% to 25,762.01. Australia’s S&P/ASX 200 rose 1.1% to 7,175.20. South Korea’s Kospi was up 1.3% to 2,655.46.
At a monetary policy meeting later on Wednesday, the Fed is expected to hike its short-term interest rate by 0.25 percentage point. That would be the first rise since 2018 to lift it off its near-zero record low and likely the start of a series of rate hikes.
The Fed is trying to slow down the economy enough to contain the high inflation sweeping the country while avoiding triggering a recession.
Inflation is already at its highest level in generations and the latest figures do not include the rise in oil prices following Russia’s invasion of Ukraine. The move comes as central banks around the world prepare to unplug support that flowed into the global economy following the outbreak of the pandemic.
“The allusion ‘moving the deckchairs on the Titanic’ is not meant to invoke despair. Rather, it aims to convey a sense of the inevitability of the Fed’s upcoming tightening cycle,” said Tan Boon Heng of Mizuho Bank in Singapore.
On Wall Street, the S&P 500 was up 2.1% to 4,262.45. The Dow Jones Industrial Average rose 1.8% to 33,544.34 and the Nasdaq rose 2.9% to 12,948.62. The Russell 2000 index of smaller companies rose 1.4% to 1,968.97.
Renewed COVID-19 worries in some regions, along with a long list of other concerns, have caused markets to oscillate wildly by the hour over the past few weeks. The war in Ukraine has pushed up prices for oil, wheat and other commodities produced in the region. This increases the risk that already high inflation will persist and combine with a potentially stagnant economy.
US data released on Tuesday showed that wholesale inflation was still very high last month, but at least not accelerating. Producer prices were up 10% yoy in February, the same rate as in January. On a monthly basis, inflation rose 0.8% in February vs. January vs. 0.9% forecast. That’s a slowdown from January’s 1.2% monthly gain.
Benchmark US crude slipped earlier Tuesday but then stabilized. In electronic trading on the New York Mercantile Exchange, it rose $2.13 to $98.57 a barrel.
A barrel of US crude fell 6.4% to trade at $96.44 on Monday. It briefly surpassed $130 last week amid concerns about supply disruptions due to the war in Ukraine.
Brent crude, the international price standard, rose $2.89 to $102.80 a barrel.
Overnight, the respite in fuel prices helped a variety of stocks. Airlines led the way after several raised their revenue forecasts for the quarter. American Airlines, Delta Air Lines, and United Airlines were all up 8% or more.
In other developments, trading in nickel was expected to resume on the London Metal Exchange on Wednesday, just over a week after it was suspended when the metal’s price skyrocketed to over $100,000 a tonne.
Russia is the third largest nickel producer in the world. Its price and that of many other commodities has skyrocketed on speculation about potential supply disruptions as Russia grapples with escalating economic sanctions following its invasion of Ukraine.
In forex trading, the US dollar fell to 118.29 Japanese yen from 118.31 yen. The euro cost $1.0973 versus $1.0955.
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` business writer Joe McDonald in Beijing contributed.
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