Hong Kong, Shanghai Stocks Gain On Fed Signal

Hong Kong shares ended Wednesday's morning session with gains after the US Federal Reserve chief indicated a greater openness to lowering interest rates, bringing positive news for investors.

The Hang Seng Index rose 0.7 percent, to 26,953 by the break.

On the mainland, the Shanghai Composite Index gained 0.6 percent, to 2,880, while the Shenzhen Composite Index added 0.5 percent, or 12.89 points, to 1,501.

Fed Chair Jerome Powell admitted that ongoing trade conflicts had dimmed the growth outlook – remarks widely seen as opening the door to a potential interest rate cut. This also boosted Asian markets.

Tokyo jumped 1.9 percent, while Seoul edged up 0.3 percent and Singapore climbed 0.6 percent.

"Powell changed the Fed messaging just enough to avoid signalling a shift from patient to panicked ... it was music to US investors' ears who have been starved of positive news of late", said Stephen Innes, Managing Partner at SPI Asset Management.

Sydney also rose 0.6 percent even as government statistics showed near-zero growth the previous quarter, underscoring fears for the economy.

The Australian economy has avoided recession for almost 28 years, but a housing slump, rising unemployment and below-target inflation prompted the central bank on Tuesday to cut its key interest rate to a historic low of 1.25 percent. (AFP)

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