Hong Kong (AFP) - Asian equities rallied Wednesday after their recent rout, with Hong Kong leading the way after Chinese authorities pledged to provide support and stability to the country's troubled markets.
Traders were piling back into regional stocks to snap up bargains in the wake of a sell-off fuelled by concerns about the war in Ukraine, the US Federal Reserve's plans to start hiking interest rates and Covid outbreaks in China that threaten its growth outlook.
Hong Kong's Hang Seng Index was at the forefront, with an eye-watering spike of more than eight percent that came after a report by the official Xinhua news agency saying China will keep the stock market stable and support overseas share listings.
The report, which cited a meeting chaired by Vice Premier Liu He, came after a series of pieces in state media looking to boost sentiment.
The news lit a fire under the HSI, where mainland Chinese tech firms had been reeling from a sell-off this year fuelled by a government crackdown on the sector and fears about possible US sanctions if China were to help Russia in its war with Ukraine.
The decision to lock down the southern Chinese tech hub of Shenzhen to fight Covid-19 compounded the crisis for the sector.
But in afternoon trade market heavyweights of the industry were flying high, with the Hang Seng Tech Index up a record 20 percent.
Alibaba, Tencent and NetEase rose around 20 percent, while JD.Com, XD Inc and Meituan surged by a third.
"Usually the market's natural bottom comes after the policy bottom, which we are seeing now," Li Weiqing at JH Investment Management Co said.
"This time around things may be different, as the rout was looking like a financial crisis; the macro figures are also pointing to a bottom.But even if this is not the end, we can at least expect more stability in the next week or so."
Shanghai's Composite Index joined in the rally, putting on more than three percent.
But while the rally was much-needed, there are fears that the selling has not finished yet.
"Personally I fear that the crisis the market faces is not just about China, it's a global issue, and not just something that regulators can solve with this," Wang Mingxuan of Quant Technology Investment said. "The calm this brings is just the calm before the storm."
The rest of Asia was also enjoying a much-needed bright day -- with Tokyo, Sydney, Seoul, Singapore and Mumbai all up more than one percent.Wellington, Taipei, Bangkok and Jakarta were also up.
Sentiment has been supported by a sharp drop in oil prices in recent days, after they hit 14-year highs and ramped up fears over already elevated inflation.
Both main contracts fell below $100 Tuesday as lockdowns in several big Chinese cities led to fears about the economy and demand in the world's biggest importer of the commodity.
Hopes for the Iran nuclear deal -- which could see Tehran restart global exports of oil -- have helped weigh on prices, as have signs that Russia-Ukraine ceasefire talks are slowly progressing.
But crude enjoyed some fresh buying sentiment Wednesday, with Brent back into triple figures on expectations that sanctions on Russia will mean supplies remain tight even if the war is brought to an end soon.
The spike in crude as well as other commodities including wheat and metals has caused a headache for central banks as they try to move away from pandemic-era monetary policy and try to rein in inflation.
And the Federal Reserve's meeting, which concludes later Wednesday, is in focus as it prepares for what is expected to be a series of hikes this year.
While the increase has been accounted for by investors, they will be keeping a close watch on what bank boss Jerome Powell says afterwards, in light of the Ukraine war and a possible slowdown in economic growth.
Meanwhile, data shows US consumer prices are rising at their fastest pace in 40 years.
"The confluence of events leading in to this meeting puts policy makers in a very unenviable position," Matt Rowe, at Nomura Securities International, told Bloomberg Television.
"It's being publicly debated whether if you create a recession to push the number down to two percent, is that actually a policy error?" he added, referring to inflation.
Key figures around 0640 GMT
Hong Kong - Hang Seng Index: UP 8.1 percent at 19,909.93
Tokyo - Nikkei 225: UP 1.6 percent at 25,762.01 (close)
Shanghai - Composite: UP 3.5 percent at 3171.57
West Texas Intermediate: UP 1.8 percent at $98.16 per barrel
Brent North Sea crude: UP 2.3 percent at $102.24 per barrel
Euro/dollar: UP at $1.0972 from $1.0951 late Tuesday
Pound/dollar: UP at $1.3053 from $1.3036
Euro/pound: DOWN at 84.06 pence from 83.92 pence
Dollar/yen: UP at 118.29 yen from 118.33 yen
New York - DOW: UP 1.8 percent at 33,544.34 (close)
London - FTSE 100: DOWN 0.3 percent at 7,175.70 (close)
