Hong Kong shares rise 9% on China’s pledge to support economy

A currency trader walks near the screen showing the Korea Composite Stock Price Index (KOSPI) at a foreign exchange trading floor in Seoul, South Korea, Wednesday, March 16, 2022. Asian stocks rose on Wednesday as investors awaited a widely expected decision from the United States.  Federal Reserve on interest rate policy.  (AP Photo/Lee ​​Jin-man)

A currency trader walks near the screen showing the Korea Composite Stock Price Index (KOSPI) at a foreign exchange trading floor in Seoul, South Korea, Wednesday, March 16, 2022. Asian stocks rose on Wednesday as investors awaited a widely expected decision from the United States. Federal Reserve on interest rate policy. (AP Photo/Lee ​​Jin-man)

PA

Hong Kong’s equity benchmark, the Hang Seng Index, climbed 9% on Wednesday after a senior Chinese official said Beijing would be more supportive of China’s slowing economy.

The surge was a respite from recent selloffs by Chinese tech companies and other pressures that had taken the Hang Seng to a six-year low.

Officials at a Cabinet meeting in Beijing promised to “reinvigorate the economy” with “support measures” for struggling real estate and other measures, the official Xinhua news agency reported.

At the meeting led by Vice Premier Liu He, President Xi Jinping’s top economic adviser, Cabinet officials called on government agencies to release other “market-friendly” policies, Xinhua said.

He also said talks between Chinese and U.S. regulators on resolving a dispute over rules governing foreign companies listed on U.S. markets had progressed.

The Hang Seng gains 9% to 20,079.61. The Shanghai Composite Index added 3.5% to 3,170.71.

Shares of e-commerce giant Alibaba Group Holding jumped 23.6%. Tencent Holdings, operator of popular messaging service WeChat, jumped 23% and live streaming site Kuaishou Technology added 31.4%.

A variety of factors contributed to the rally, including comments from Ukrainian President Volodymyr Zelenskyy suggesting there was still reason to be optimistic negotiations could still result in a deal with the Russian government.

Yet Russia stepped up its bombardment of the Ukrainian capital and launched new assaults on the port city of Mariupol, making bloody advances on the ground on Wednesday as Zelenskyy prepared to issue a direct appeal for more help in a rare speech by a foreign leader in the United States. Congress.

Japan’s benchmark Nikkei 225 rose 1.6% to end at 25,762.01. Australia’s S&P/ASX 200 gained 1.1% to 7,175.20. The South Korean Kospi gained 1.3% to 2,655.46.

At a policy meeting later Wednesday, the Fed is expected to raise its short-term policy rate by 0.25 percentage points. This would be the first increase since 2018, pulling it off its all-time high of near zero, and likely the start of a series of increases.

The Fed is trying to slow the economy enough to stem the high inflation that is sweeping the country while avoiding triggering a recession.

Inflation is already at its highest level in generations, and the most recent figures do not include the spike in oil prices after Russia invaded Ukraine. The move comes as central banks around the world prepare to end support for the global economy following the outbreak of the pandemic.

“The reference to ‘rearranging deck chairs on the Titanic’ is not meant to invoke despair. Rather, it is meant to convey a sense of the inevitability of the upcoming Fed tightening cycle,” said Tan Boon Heng of Mizuho Bank in Singapore.

On Wall Street, the S&P 500 gained 2.1% to 4,262.45. The Dow Jones Industrial Average gained 1.8% to 33,544.34 and the Nasdaq rose 2.9% to 12,948.62. The Russell 2000 Small Business Index rose 1.4% to 1,968.97.

Renewed concerns about COVID-19 in some regions along with a long list of other concerns have caused wild hour-to-hour swings in the markets over the past few weeks. The war in Ukraine has pushed up the prices of oil, wheat and other commodities that the region produces. This increases the threat that already high inflation will persist and combine with a potentially stagnant economy.

US data released on Tuesday showed that inflation was still very high at the wholesale level last month, but at least it has not accelerated. Producer prices rose 10% in February from a year earlier, the same rate as in January. Month-on-month inflation rose 0.8% in February from January, versus 0.9% expected. That’s a slowdown from January’s 1.2% month-over-month increase.

Benchmark U.S. crude slid earlier on Tuesday, but then leveled off. It gained $2.13 to $98.57 a barrel in electronic trading on the New York Mercantile Exchange.

A barrel of US crude fell 6.4% to $96.44 on Monday. It had briefly topped $130 last week when concerns about supply disruptions due to the war in Ukraine were at their height.

Brent crude, the international price standard, added $2.89 to $102.80 a barrel.

Overnight, the reprieve on fuel prices helped a wide variety of stocks. Airlines led the way after several raised their revenue forecasts this quarter. American Airlines, Delta Air Lines and United Airlines all climbed 8% or more.

In other developments, nickel trading was due to resume on the London Metal Exchange on Wednesday, just over a week after it was suspended when the metal’s price soared to over $100,000 a tonne.

Russia is the world’s third largest producer of nickel. Its price and that of many other commodities rose on speculation of possible supply disruptions as Russia faces widening economic sanctions following its invasion of Ukraine.

In currency trading, the US dollar fell slightly to 118.29 Japanese yen from 118.31 yen. The Euro traded at $1.0973, down from $1.0955 previously.

___

AP Business Writer Joe McDonald in Beijing contributed.

About Dawn Valle

Check Also

‘I could see the trap in the ladette thing’: Lush’s Miki Berenyi on childhood abuse, hatred of Britpop and her relief at having dodged fame | Music

Ohen Miki Berenyi thinks about Britpop, certain memories stick out – like the night at …