Asian stocks rally strongly as Fed hike, Ukraine talks boost sentiment
Tokyo (TIP)-Japan and Hong Kong led a jump in regional stocks on Thursday, joining a rally on Wall Street overnight as potential risks from Federal Reserve monetary tightening to the Ukraine war and a slowdown in China became less murky.Treasury yields eased a little after spiking to nearly three-year highs overnight – with shorter-end yields rising more to flatten the curve – after the Fed raised the policy rate for the first time since 2018. The Fed increased rates by an as-expected quarter point and telegraphed equivalent hikes at every meeting for the remainder of this year to aggressively stamp out inflation. The safe-haven dollar, though, remained on the back foot and oil also stabilized well south of recent multi-year highs amid signs of material progress in talks between Russia and Ukraine to end a three-week-old invasion that Moscow says is a “special military operation” to demilitarize its neighbor. Meawhile, investor concerns about a sharp slowdown for China, which is battling a spreading Covid-19 outbreak with ultra-restrictive measures, were assuaged on Wednesday after Vice Premier Liu He signalled more stimulus to support markets. Japan’s Nikkei soared 3.0% and touched a two-week high in Thursday’s session, while South Korea’s Kospi jumped 1.6% and Australia’s benchmark added 1.4%. Chinese blue chips gained 2.1%, and Hong Kong’s Hang Seng surged 5.2%. An MSCI index of regional shares rallied 2.5%. US stock futures pointed to a 0.3% decline at the restart, but following a 2.2% surge for the S&P 500 overnight.
Source: Reuters
