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Asian Shares Follow Wall Street Higher Ahead Of Fed Meeting

stockmarkets aug17 20sep22 lt

Asian stocks recovered from recent losses on Tuesday, thanks to a rebound in the final hour of New York trading overnight. The upside, however, remain capped by lingering uncertainty over the size of the interest rate hike by the Federal Reserve.

The Fed begins a two-day meeting later today, with a rate hike of 75-100 basis points in the cards after hotter-than-expected U.S. inflation data last week.

China's Shanghai Composite Index edged up 0.2 percent to 3,122.41 after the People's Bank of China kept its benchmark lending rates unchanged at a monthly fixing, as expected.

The central bank is facing a balancing act of loosening monetary policy while also supporting the yuan. Hong Kong's technology-heavy Hang Seng Index jumped 1.2 percent to 18,781.42.

Japanese shares rose even as data showed consumer price inflation in the country jumped in August to 3.0 percent, its highest level since November 1991 due to increased pressures on the economy from high commodity prices and a softening yen.

The Bank of Japan is set to maintain ultra-low interest rates and its dovish policy guidance on Thursday as other central banks opt to hike interest rates to fight soaring inflation.

The Nikkei 225 Index rose 0.4 percent to 27,688.42, while the broader Topix ended 0.5 percent higher at 1,947.27.

Seoul stocks closed higher to snap a four-day losing streak, as investors scooped up oversold stocks ahead of the Fed meeting. The Kospi climbed 0.5 percent to 2,367.85.

National flag carrier Korean Air surged 3.2 percent and Asiana Air soared 3.6 percent after U.S. President Joe Biden declared the COVID-19 pandemic over in the United States.

Australian markets ended sharply higher, led by heavyweight banking and mining stocks. The benchmark S&P ASX 200 Index jumped 1.3 percent to 6,806.40, while the broader All Ordinaries Index gained 1.2 percent to close at 7,030.

New Hope Corp. soared 8.8 percent after the coal miner reported a massive jump in its annual profit on soaring thermal coal prices.

Minutes of the Reserve Bank of Australia's September monetary policy meeting showed earlier in the day that "all else equal, members saw the case for a slower pace of increase in interest rates as becoming stronger as the level of the cash rate rises."

New Zealand shares eked out modest gains, with the benchmark S&P/NZX 50 Index ending up 0.3 percent at 11,570.43.

U.S. stocks fluctuated before closing higher overnight as the Fed meeting loomed and a measure of homebuilder sentiment fell for a ninth straight month.

The Dow rose 0.6 percent, the tech-heavy Nasdaq Composite climbed 0.8 percent and the S&P 500 added 0.7 percent.

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