SHANGHAI, RAW – Asian share markets rose on Wednesday on a rebound in battered Chinese stocks and ahead of a closely watched meeting of the US Federal Reserve, while oil prices remained volatile as investors’ weighed the outcome of peace talks on Ukraine.

Ukrainian President Volodymyr Zelenskiy said on Wednesday that peace talks were sounding more realistic but more time was needed, even as Russian air strikes continued and the refugee tally from Moscow’s invasion reached 3 million.

The rebound in Asian shares came a day after spiking coronavirus infections in China and dashed expectations of a rate cut by the country’s central bank sent shares in mainland and Hong Kong markets tumbling.

“People are concerned that policymakers would believe that the economy is doing much better and growth is rebounding and there’s no need for further policy easing measures,” said Ting Lu, chief China economist at Nomura.

“I think a small rate cut is not a big deal anyway, but people are concerned about for example zero-COVID strategy, people are concerned about the property market and … other policies.”


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China has seen increasing positive changes in its economic performance backed up by surprisingly good economic data, but the impacts of the latest COVID-19 resurgence need to be watched, China’s statistics bureau spokesman said on Tuesday.

On Wednesday, Chinese health authorities reported a slight drop in new cases compared to a day earlier, although major Chinese cities continue to grapple with spreading cases.

A 2.6 per cent jump in Hong Kong’s Hang Seng index and a 0.5 per cent gain in the blue-chip CSI300 index led rises across Asia on Wednesday morning, with MSCI’s broadest index of Asia-Pacific shares outside Japan up 1.21 per cent.

Australian shares were up 1.08 per cent, and Seoul’s Kospi added 0.55 per cent, while Japan’s Nikkei stock index rose 1.29 per cent.

The gains in Asia followed a relief rally overnight on Wall Street driven by hopes of a resolution in Ukraine. The S&P 500 gained 2.14 per cent, the Nasdaq Composite jumped 2.92 per cent and the Dow Jones Industrial Average rose 1.82 per cent.

Analysts at ING said in a note that they expected market moves in Asia to be “cautious” ahead of the Fed meeting.

Investors are expecting the US central bank to raise interest rates for the first time in three years by at least 25 basis points amid surging prices. Traders will also be closely watching the Fed for details on how it plans to end its bond-buying program.

US bond yields held steady in early Asian trade, with the benchmark 10-year note yield at 2.1455 per cent, after earlier rising to 2.169 per cent, the highest since June 2019.

The two-year yield was last at 1.847 per cent from a close of 1.857 per cent.

The US dollar was down slightly against a basket of peers, trading at 98.904, and unchanged against the yen at 118.28. The euro edged up 0.12 per cent to $US1.0964 ($A1.5211).

Oil prices, which had traded lower early in the session, turned higher, with Russia’s invasion of Ukraine continuing to stoke volatile trade.

Global benchmark Brent crude rose 0.41 per cent to $US100.30 ($A139.15) per barrel, and US crude added 0.45 per cent to $US96.87 ($A134.40) per barrel.

Highlighting the impact of global disruptions and soaring oil costs, 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 spot gold price rose 0.14 per cent to $US1,920.55 ($A2,664.52) per ounce.