Most Asian stock markets went sharply up on Thursday after the head of the Federal Reserve, Jerome Powell, said that the central bank is going to slow the rate of interest rate hikes. The hopes for a full reopening were also boosted by China’s decision to ease some anti-COVID measures.
Chinese stocks were some of the best performers of the day. The Shanghai Shenzhen CSI 300 and the Shanghai Composite indexes both went up by 1.4% and 0.7%, respectively, to reach their highest levels in over two months. The Hang Seng index in Hong Kong also rose 1.6% to a two-month high.
Some anti-COVID measures were weakened in Guangzhou and Chongqing after a number of protests against the government’s strict zero-COVID policy. This made people feel better about China.
Related:Â Asian stocks go up despite uncertainty in China, and people wait for Powell’s speech.
But so far, Beijing hasn’t shown that it plans to make the policy even less strict, even though China is dealing with a record-high rise in infections.
Weak business activity data that came out on Thursday showed that the country’s economy is getting worse, especially since anti-COVID measures have brought all business activity to a halt this year.
Still, Chinese markets have risen sharply in recent days as people hope that the government will change its strict zero-COVID policy because the economy is getting worse and the public is getting more angry.
Broader On Thursday, Asian markets went up after Fed Chair Jerome Powell said that interest rate hikes would be smaller in the coming months. The move helps regional markets, which have been hit hard this year by a sharp rise in interest rates.
Powell’s comments helped the markets most when they were focused on technology. The Nikkei 225 index in Japan went up 1.1%, which was helped by better-than-expected capital spending numbers for the third quarter. This was a small bright spot in Japan’s otherwise troubled economy.
The Taiwan Weighted Index went up by 1.1%, and the Nifty 50 and BSE Sensex 30 indices in India both hit all-time highs.
After data showed that the country’s trade deficit grew even more in November, South Korean stocks lagged behind their peers. The KOSPI rose by only 0.3%.
Concerns about the economy as a whole continued to grow as the Fed’s Beige Book, which came out on Wednesday, showed growing pessimism about the world’s largest economy.
Powell also said that rate hikes would slow down, but he also warned that U.S. interest rates could reach a higher peak than expected, especially since inflation in the country has stayed high for a long time.
Related: Amid dovish Fed indications, Asian stocks decline but end the week higher.
In the medium term, this kind of situation is bad for stock markets.
