Asian stock markets followed Wall Street higher on Tuesday ahead of a Federal Reserve decision on another possible interest rate hike amid worries about global banks.
Shanghai, Hong Kong and Seoul advanced. Japanese markets were closed for a holiday. Oil prices declined.
Wall Street’s benchmark S&P 500 index rose 0.9% on Monday after U.S., European and Japanese central banks announced measures to ease strains on the financial system, including lending more dollars if necessary.
The collapse of two U.S. banks and the takeover of troubled Credit Suisse have heightened fears other lenders might crack under the strain of repeated rate hikes to cool economic activity and inflation that is near multi-decade highs.
Traders expect the Fed to go ahead with another rate hike Wednesday but think it might be held to 0.25 percentage points, down from the 0.5 points previously expected. “Can the Federal Reserve really continue to hike rates in the face of a banking crisis?” Clifford Bennett of ACY Securities said in a report. “There are ongoing stresses in the banking system that will only grow with further rate hikes.”
The Shanghai Composite Index gained 0.4% to 3,246.88 and the Hang Seng in Hong Kong advanced 0.9% to 19,175.92.
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