World stocks staged a recovery on Wednesday with Hong Kong leading the way in spectacular style after Chinese authorities vowed to support its struggling markets.
The official Xinhua news agency said that Beijing would ensure capital market stability and implement measures to support its troubled property sector.
The news sparked Hong Kong’s Hang Seng Index into action, after mainland Chinese tech firms had been left reeling from a series of sell-offs this year caused by the government’s relentless crackdowns on the sector.
Read more: Chinese Tech Stocks Soar After State Council Pledges Support
The Hang Seng Index soared 9.08%, or 1,672.42 points, to close at 20,087.50.
The Shanghai Composite Index climbed 3.48%, or 106.75 points, to 3,170.71, while the even the lockdown-hit Shenzhen Composite Index on China’s second exchange rose 3.62%, or 72.88 points, to 2086.24.
Elsewhere the markets were watching for signs of light in the Ukraine conflict, while Treasury yields hit their highest since mid-2019 in anticipation of the first US interest rate hike in three years.
Western governments have slapped tough sanctions on Russia for the invasion, which Moscow calls a “special operation.”
Investors are expecting the US Federal Reserve to raise interest rates by at least 25 basis points amid surging prices later on Wednesday. Traders will also be closely watching the Fed for details on how it plans to end its bond-buying programme.
The MSCI world equity index rose 0.87%, moving away from one-year lows hit in the previous session. S&P futures gained 0.79% after US stocks enjoyed a relief rally overnight on Wall Street, driven by hopes of a resolution in Ukraine.
S&P, Nasdaq, Dow Jones Rise
The S&P 500 gained 2.14%, the Nasdaq Composite jumped 2.92% and the Dow Jones Industrial Average rose 1.82%.
European stocks gained 2.2% and MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 4.2% after China’s Vice Premier Liu He said Beijing will roll out more measures to boost the Chinese economy, as well as favourable policy steps for its capital markets.
On Wednesday, Chinese health authorities reported a slight drop in new Covid-19 cases compared with a day earlier, although major Chinese cities continue to grapple with controlling the spread of the virus.
US 10-year Treasury yields rose to 2.204% on the Fed rate hike hopes, their highest since June 2019. The five-year yield rose to 2.149%, its highest since May 2019.
Russia has $117.2 million in interest payments due on two dollar-denominated eurobonds on Wednesday. Its finance ministry has said it will make the payments in roubles if sanctions prevent it from paying in dollars – a move markets would view as a default.
Japan Trade Deficit
Japan reported a wider-than-expected trade deficit in February as an energy-driven surge in import costs caused by massive supply constraints added to vulnerabilities for the world’s third-largest economy.
The benchmark Nikkei 225 index gained 1.64% or 415.53 points to end at 25,762.01, while the broader Topix index rose 1.46% or 26.62 points to 1,853.25.
Indian stocks advanced too and Mumbai’s signature Nifty 50 index up 1.87%, or 312.35 points, to close at 16,975.35.
Oil prices have been volatile since the Ukraine invasion and global benchmark Brent crude rose 2.38% to $102.22 per barrel, and US crude added 1.62% to $98.08.
Spot gold was little changed at $1,918.95 per ounce.
Key figures around 0820 GMT
Hong Kong – Hang Seng Index > UP 9.1% at 20,087.50 (close)
Tokyo – Nikkei 225 > UP 1.6% at 25,762.01 (close)
Shanghai – Composite > UP 3.5% at 3,170.71
London – FTSE 100 > UP 1.3% at 7,271.56
West Texas Intermediate > UP 2.0% at $98.39 per barrel
Brent North Sea crude > UP 3.0% at $102.86 per barrel
New York – DOW > UP 1.8% at 33,544.34 (Tuesday close)
- Reuters with additional editing by Sean O’Meara
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