By Andrew Galbraith

SHANGHAI (Reuters – Asian share market rose on Wednesday, aided by a recovery in Chinese stocks. This was ahead of a U.S. Federal Reserve meeting that will be closely monitored. Oil prices remained volatile as investors pondered the results of Ukraine peace talks.

On Wednesday, Volodymyr Zelenskiy, the Ukrainian president said that talks are sounding more realistic. However more time is needed. This was despite Russian air strikes continuing and 3 million refugees fleeing Russia’s invasion.

Asian shares rebounded one day after coronavirus infective outbreaks in China. The resulting disappointment in expectations that the central bank would cut interest rates sent share prices in Hong Kong and mainland markets plunging.

Ting Lu, Nomura’s China chief economist stated: “People worry that policymakers might believe the economy has improved and growth is on its way back and therefore there are no further need for policy easing.”

I think that a modest rate reduction isn’t a major deal, but people worry about things like zero COVID strategy and the property market.

China has been seeing positive economic results, with surprisingly strong economic data backing it up. But, China’s Statistics Bureau spokesperson said that the effects of COVID-19 revival need to be monitored.

Chinese authorities said Wednesday that there had been a small drop in the number of new cases, but major Chinese cities still struggle with cases spreading.

On Wednesday, Asia saw a 2.6% increase in Hong Kong’s stock market and a 0.5% rise in blue-chip CSI300. MSCI’s largest index of Asia-Pacific shares was up 1.21%.

Australian shares rose 1.08% while Seoul’s Kospi increased 0.55% and the stock market rose 1.29%.

Asia saw gains following a Wall Street relief rally that overnight was driven by the hope of a Ukrainian resolution. They gained 2.14 percent, while the increased by 2.92% and the rose by 1.82%.

EYES ON FOOD

ING analysts stated in a note they expect market movements in Asia to remain “cautious,” ahead of Fed meetings.

Investors expect the U.S. central banking to increase interest rates by at least 25 basis point for the first time since 2013, amid escalating prices. The Fed will be closely watched by traders for information on its plans for ending the bond-buying programme.

U.S. bond yields remained steady in early Asian trading, with the benchmark 10 year note yield at 2.1455%. It had previously risen to 2.169%. That’s the highest rate since June 2019.

From 1.857%, the two-year yield stood at 1.847%.

US dollar traded at 98.904 against a group of peers and was unchanged against the Japanese yen at 118.128. Euro gained 0.12% to $1.0964

The session saw oil prices rise after they had been lower in the beginning, but then rose as a result of Russia’s invasion Ukraine.

Global benchmark rose 0.45% to $100.30/barrel and increased 0.45% at $96.87/barrel. Japan’s February trade deficit was higher than expected due to an increase in oil prices and global disruptions. This is evidence of the vulnerability for Japan, which reported its third largest economy.

It rose by 0.4% to $1.920.55 per an ounce.