Most Asian stocks reverse early losses after Fed rate hike decision

Hong Kong () — Most Asia Pacific stocks pared early losses on Thursday, after the US Federal Reserve reaffirmed its effort to reduce inflation.

In Hong Kong, the benchmark Hang Seng index traded 1.5% higher, leading gains in the region. One of the biggest gainers was internet giant Tencent, which rose more than 7% after posting a sharp rise in its online advertising business in the December quarter on Wednesday.

In Japan, the Nikkei 225 was flat after opening lower. The broader Topix index was down 0.3%, reversing some of its morning losses.

South Korea’s Kospi rose 0.2%, while Australia’s S&P ASX 200 rose half a percentage point.

Asian stocks had opened broadly lower, following losses on Wall Street. In the US, the Dow Jones closed down 1.6%, while the S&P 500 fell around 1.7%. The Nasdaq Composite fell 1.6%.

“Looking ahead, while we see fundamental value in Asian and Japanese equities…we remain concerned about a potential pullback in US equities, assuming US data deteriorates in the coming months” , Nomura analysts wrote in a research note on Thursday.

US markets had been choppy on Wednesday before settling into the red as investors digested the Federal Reserve’s quarter-point rate hike and searched for clues about the state of the banking sector collapse.

The Fed raised rates by a quarter point at the end of its two-day meeting, despite the fact that its historic rate-hike campaign was a contributing factor to the banking crisis.

Investors were heartened by strong hints from the central bank that its aggressive pace of interest rate hikes would come to an end soon. Still, the central bank has also warned that rate cuts will not come this year.

— ‘s Krystal Hur and Laura He contributed reporting