Hong Kong () — Asia Pacific stocks opened higher on Wednesday, following the bullish trend reported in the US, as investors awaited the US Federal Reserve’s upcoming monetary policy decision expected to be announced later this day. .
Hong Kong’s benchmark Hang Seng Index was trading 2.3% higher, leading gains in the region. Japan’s Nikkei 225 rose 1.8%, while the broader Topix index also rose 1.8%.
Elsewhere in the region, both South Korea’s Kospi and Australia’s S&P ASX were up about 1%. In mainland China, the Shanghai Composite rose 0.5%.
The MSCI Asia Pacific Index, which excludes Japanese companies, was up 0.8% broadly. US futures, including the S&P 500 and Nasdaq, were flat in Asian trade.
“Asia is trading higher today as risk appetite appears to be returning amid declining volatility around bank stocks, at least for now ahead of Wednesday’s FOMC statement,” he said. Stephen Innes, managing partner at SPI Asset Management, referring to the Federal Open Market Committee, which is due to announce its decision on interest rates this Wednesday afternoon.
Investors are largely pricing in a 25 basis point rate hike and will listen closely to see if Federal Reserve Chairman Jerome Powell can justify raising rates while reassuring panicked markets that the Fed can maintain the safety of the banking system.
US stocks closed higher on Tuesday as shares of regional banks rebounded from record losses earlier in the month.
Shares of troubled lender First Republic led the way, rising 30%, recouping much of the losses from its 47% drop in the previous session. The SPDR regional banking ETF, which tracks a number of small and midsize bank stocks, gained 5.8% on the day.
The push came after US Treasury Secretary Janet Yellen told an event hosted by the American Bankers Association that the federal government was willing to guarantee more deposits should the current banking collapse continue. .
— ‘s Nicole Goodkind contributed to this report.
