It was the push back on a 75bp hike from the US Fed Chair Powell that set the market rally in motion.

Lavanya Venkateswaran

economist, Mizuho Bank

China’s services sector activity shrunk further in April, a private sector survey showed Thursday. The Caixin services Purchasing Managers’ Index (PMI) declined to 36.2 for April, lower than March’s reading of 42.

The 50-point mark in PMI readings separates growth from contraction. PMI readings are sequential and represent month-on-month expansion or contraction.

Data released over the weekend also showed Chinese factory activity contracted in April as Covid lockdowns hit industrial production.

Hong Kong’s Hang Seng index also climbed 0.61%. Shares of JD.com and Bilibili jumped 1% and 4.31%, respectively. The two companies were added by the U.S. Securities and Exchange Commission to a list of firms facing delisting risk from American exchanges.

The S&P/ASX 200 in Australia climbed 0.58%, while MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.85% higher.

Markets in Japan and South Korea are closed on Thursday.

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The U.S. Federal Reserve on Wednesday increased its benchmark interest rate by half a percentage point, in line with market expectations. The central bank also outlined a program whereby it will eventually cut its bond holdings by $95 billion a month.

Fed Chair Jerome Powell emphasized the commitment to bringing inflation down, though he said a 75 basis points hike is “not something the committee is actively considering.”

Markets on Wall Street jumped overnight following the Fed decision, with the S&P 500 rising nearly 3% to 4,300.17. The Dow Jones Industrial Average surged 932.27 points, or 2.81%, to 34,061.06. The Nasdaq Composite soared 3.19% to 12,964.86.

“It was the push back on a 75bp hike from the US Fed Chair Powell that set the market rally in motion,” Lavanya Venkateswaran, an economist at Mizuho Bank, wrote in a note.

“The market reaction, mainly underscoring a repricing from the aggressive rate hikes built in, does not take away from the hawkish Fed intentions,” said Lavanya.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 102.485 following a recent decline from above 103.

The Japanese yen traded at 129.02 per dollar, stronger as compared to levels above 130 seen against the greenback yesterday. The Australian dollar changed hands at $0.725 after a recent surge from below $0.721.

Oil prices were higher in the morning of Asia trading hours, with international benchmark Brent crude futures up 0.26% to $110.43 per barrel. U.S. crude futures climbed 0.14% to $107.96 per barrel.

— CNBC’s Jeff Cox contributed to this report.



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