Hong Kong shares soar 9% on China pledge to support economy

NEW YORK — U.S. markets are poised to follow global shares higher Wednesday after Chinese leaders promised more support for the slowing Chinese economy, while investors awaited the outcome of a meeting of the Federal Reserve.

Futures for the Dow industrials were up 1.2% and S&P 500 futures gained 1.3% after Hong Kong’s benchmark surged 9% overnight.

Various factors have contributed to the latest rally, including comments by Ukrainian President Volodymyr Zelenskyy suggesting there was still some reason to be optimistic negotiations might yet yield an agreement with the Russian government.

Yet, Russia escalated its bombardment of the Ukrainian capital and launched new assaults on the port city of Mariupol, making bloody advances on the ground Wednesday as Zelenskyy prepared to make a direct appeal for more help in a rare speech by a foreign leader to the U.S. Congress.

France’s CAC 40 jumped 3.5%, while Germany’s DAX added 3.2% and Britain’s FTSE 100 rose 1.4%.

At its policy meeting later Wednesday, the Fed is expected to increase its key short-term rate by 0.25 percentage points. That would be the first increase since 2018, pulling it off its record low of nearly zero, and likely the start to a series of hikes.

The Fed is trying to slow the economy enough to tamp down the high inflation sweeping the country while avoiding triggering a recession.

Inflation is already at its highest level in generations, and the most recent numbers don’t include the surge in oil prices after Russia invaded Ukraine. The move comes as central banks around the world are preparing to pull the plug on support poured into the global economy after the pandemic struck.

“The ‘rearranging the deck chairs on the Titanic’ allusion is not mean to invoke despair. Rather, it’s meant to convey a sense of inevitability of the Fed’s tightening cycle ahead,” said Tan Boon Heng of Mizuho Bank in Singapore.

The surge in Hong Kong’s Hang Seng index was a reprieve from recent heavy selling of Chinese technology companies and other pressures that had taken it to six-year lows.

At a Cabinet meeting Wednesday officials promised to “invigorate the economy” with “supporting measures” for the struggling real estate and other steps, the official Xinhua News Agency reported.

At a meeting led by Vice Premier Liu He, President Xi Jinping’s top economic adviser, Cabinet officials called on government agencies to issue other policies that are “favorable to the market,” Xinhua said.

It also said that talks between Chinese and U.S. regulators on resolving a dispute over rules governing foreign companies listed on U.S. markets had made progress.

The Hang Seng gained 9.1% to 20,087.50. The Shanghai Composite index added 3.5% to 3,170.71.

E-commerce giant Alibaba Group Holding’s shares jumped 23.6%. Tencent Holdings, operator of the popular WeChat message service, surged 23% and livestreaming site Kuaishou Technology added 31.4%.

Japan’s benchmark Nikkei 225 rose 1.6% to finish at 25,762.01. Australia’s S&P/ASX 200 added 1.1% to 7,175.20. South Korea’s Kospi gained 1.4% to 2,659.23.

Renewed COVID-19 worries in some regions plus a lengthy list of other concerns have caused wild hour-to-hour swings in markets in recent weeks. The war in Ukraine has pushed prices for oil, wheat and other commodities the region produces sharply higher. That’s raising the threat that already high inflation will persist and combine with a potentially stagnating economy.

Benchmark U.S. crude rose 49 cents to $96.93 a barrel in electronic trading on the New York Mercantile Exchange.

A barrel of U.S. crude dropped 6.4% to settle at $96.44 on Tuesday. It had briefly topped $130 last week when worries about disruptions to supplies because of the war in Ukraine were at their height.

Brent crude, the international pricing standard, rose 11 cents to $100.02 per barrel.

In other developments, trading in nickel was halted again Wednesday on the London Metal Exchange after trading briefly resumed following a weeklong suspension when the price of the metal skyrocketed to over $100,000 per ton. The exchange said it’s investigating a “system error” that resulted in a few trades being carried out under the lower price limit introduced to curb volatility.

Russia is the world’s No. 3 producer of nickel. Its price and that of many other commodities has surged on speculation over possible disruptions to supplies as Russia contends with widening economic sanctions following its invasion of Ukraine.

In currency trading, the U.S. dollar stood at 118.29 Japanese yen, little changed from 118.31 yen. The euro cost $1.1002, up from $1.0955.

Shares of Starbucks rose more than 5% in premarket trading after President and CEO Kevin Johnson said he will retire next month. Former CEO and company founder Howard Schultz will replace him on an interim basis.

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AP Business Writer Joe McDonald in Beijing contributed.