Asian stocks rise after Fed chair downplays bigger rate hike

BEIJING (AP) — Asian stock markets followed Wall Street higher on Thursday after the Federal Reserve chairman downplayed the likelihood of bigger rate hikes following the U.S. central bank's biggest increase in two decades.

Shanghai, Hong Kong and Sydney advanced. Markets in Japan and South Korea were closed for holidays.

Wall Street's benchmark S&P 500 index climbed 3% on Wednesday for its best day in two years after the Fed raised its key interest rate by half a percentage point, or double its usual margin, but its chairman Jerome Powell said the U.S. central bank is “not actively considering” a bigger increase.

"The Fed continues to try and orchestrate a soft landing while tackling high levels of inflation,” David Chao of Invesco said in a report.

The Shanghai Composite Index gained 0.9% to 3,072.98 and Hong Kong's Hang Seng rose 0.6% to 21,004.37. Sydney's S&P-ASX 200 advanced 0.7% to 7,358.00.

India's Sensex opened up 1.3% at 56,388.83. New Zealand gained while Singapore and Bangkok declined.

The Fed raised its key rate to a range of 0.75% to 1%, the highest point since the coronavirus pandemic struck two years ago.

Powell's comments appeared to be aimed at easing fears the Fed, which was accused of reacting too slowly as inflation surged last year, might be headed for an unusually large rate hike of three-quarters of a percentage point at its June meeting.

Investors worry about whether the Fed can extinguish inflation without pushing the economy into a downturn.

The Fed announced details of how it will start reducing its holdings of Treasury debt and mortgage-backed securities. The central bank has been buying bonds to pump money into the financial system and push down long-term interest rates.

Powell said the U.S. economy can make it through rate...