MSCI’s broadest index of stocks in the Asia-Pacific region outside Japan rose 0.52%, although trading was thin with Japanese and Korean markets closed due to public holidays.
Crude prices, meanwhile, soared as the European Union outlined details of its plan to ban the use of Russian oil, heightening supply concerns.
Early moves in Asia followed an overnight US rally where the Dow Jones Industrial Average rose 2.81%, the S&P 500 2.99% and the Nasdaq 3.19%. [.N]
“The markets seemed to breathe a sigh of relief after the Fed’s 50 basis point hike and Powell’s comment that a 75 basis point hike is not something the (Fed Policy Committee ) is currently considering,” ANZ analysts said.
In Asia, the focus is on markets in mainland China, which are returning from a three-day break on Thursday, with investors watching closely whether the gains made by tech just before the break hold up.
Investors will be watching closely if the gains made by the tech sector just before the break will hold up. Chinese stocks rallied after Beijing signaled an easing in its crackdown on the once booming tech sector and pledged policy support for the world’s second-largest economy.
This week Hong Kong equities fell slightly while the offshore Chinese yuan has been volatile although still stronger than last week. [.HK]
The Federal Reserve raised its benchmark overnight interest rate by half a percentage point, the biggest jump in 22 years. Fed Chairman Jerome Powell said policymakers were ready to approve rate hikes of half a percentage point at upcoming policy meetings in June and July.
However, Powell also said the Fed was not “actively” considering a 75 basis point rate hike, tempering some market expectations for aggressive tightening.
This drove down the dollar, where it remained in early Asia.
The Dollar Index, which measures the greenback against six other currencies, was at 102.56, after closing as low as 103.63 on Wednesday.
US treasury bills were not traded due to the Japanese holiday, but they also fell overnight. The benchmark 10-year yield was 2.9402%, down from just over 3%.
Oil extended its gains on Thursday after the European Union, the world’s largest trading bloc, outlined its plans to phase out Russian oil imports.
US crude futures gained 0.5% to $108.36 a barrel and Brent rose 0.6% to $110.8. Both benchmarks rose more than $5 a barrel on Wednesday. [O/R]