Berliner Boersenzeitung - Asian markets rally again as Hong Kong extends surge

Regional sentiment remains buoyant after China's top economic official vowed measures to support beaten-down markets and indicated that a debilitating crackdown on the technology sector was nearing its end.

The news lit a fire under Asia on Wednesday -- sending Hong Kong's Hang Seng Index rocketing more than nine percent and the city's tech gauge flying by a record 22 percent.

That provided a platform for traders in Europe and New York, where an index of US-listed Chinese firms ended up 33 percent.

And the buying continued in early business on Thursday, with the HSI piling on more than six percent at the open before easing back slightly, while market heavyweight tech titans built on their eye-watering rallies.

Alibaba, Tencent and JD.com were all up around 10 percent, on top of the 20-35 percent gains clocked up the day before.

Companies in other sectors that have been in Beijing's cross hairs over the past year, such as casinos and developers, also extended a rally.

"The statement addressed so many issues on various fronts, which is really rare," Ding Shuang, at Standard Chartered, said.

"Selloffs tended to be self-fulfilling partly because of the lack of response from the government," but part of the government's aim is likely to break that inertia and stabilise expectations, he added.

Adding to the broadly positive mood on trading floors were hopes that Ukraine and Russia were edging towards a ceasefire in a war that has sent markets spiralling, and fears over inflation soaring with commodity prices.

Traders have grown increasingly worried that the spike in inflation and war in Europe will knock off-course an already fragile pandemic recovery, providing a headache for central bankers who are trying to rein in ultra-loose monetary policies.

And the Fed appeared to soothe some of those worries Wednesday when it lifted interest rates -- by a quarter of a point -- for the first time since 2018 but gave an upbeat review of the world's number-one economy.

Governor Jerome Powell said there was little chance of a recession in the next year and noted that it was "very strong and well positioned to handle tighter monetary policy".

He told reporters after the rate hike: "We're not going to let high inflation become entrenched. The costs of that would be too high."

The Fed was committed to using its "powerful tools" to prevent that, he added, while a gauge of future hikes suggested another six could be on the cards before the end of the year.

"The (policy board) was interpreted as hawkish, but expectations ran high for that scenario," said Stephen Innes of SPI Asset Management.

"Perhaps getting the event out of the way without a significant shock was enough to keep risk supported and, potentially, the dollar on the back foot.

"Risk assets could be interpreting this arguably 'too aggressive'. I think it's too early to panic on that front, 25 basis points is not a dramatic initial tightening and... the Fed maintains its flexibility.

"The last thing the Fed wanted to do was to err on the side of caution, which would have crushed their credibility.

"I think the Fed's hawkish tone is pushing away worries of the Fed behind the curve and inflation out of control. And stock markets like that."

After the healthy gains on Wall Street, Asia picked up the baton happily.

Tokyo charged three percent higher, while Shanghai, Sydney, Seoul, Manila and Wellington were all up more than one percent, while there were also big gains for Singapore, Jakarta and Taipei.

"The overall message you got from the Federal Reserve today was very clear," Deutsche Bank's Alan Ruskin told Bloomberg Television.

"They want financial conditions to tighten. The issue there is, can you soft-land this thing? Historically, when the Fed tightens, you do get some hard landing somewhere."

- Key figures around 0250 GMT -

Hong Kong - Hang Seng Index: UP 4.5 percent at 20,986.19 (break)

Tokyo - Nikkei 225: UP 3.0 percent at 26,529.89

Shanghai - Composite: UP 1.6 percent at 3,220.89

Brent North Sea crude: UP 1.1 percent at $99.09 per barrel

West Texas Intermediate: UP 1.2 percent at $96.17 per barrel

Euro/dollar: DOWN at $1.1036 from $1.1038 late Tuesday

Pound/dollar: UP at $1.3155 from $1.3148

Euro/pound: UP at 83.91 pence from 83.90 pence

Dollar/yen: UP at 118.81 yen from 118.73 yen

New York - DOW: UP 1.6 percent at 34,063.10 (close)

London - FTSE 100: UP 1.6 percent at 7,291.68 (close)

(U.Gruber--BBZ)