Asian shares rise on Fed rate hopes despite China worries

TOKYO (AP) — Asian shares gained Thursday, although optimism about the Federal Reserve holding back on aggressive interest rate raises was countered by some uncertainty about coronavirus restrictions in China.

Trading was relatively muted in Asia ahead of U.S. markets being closed for Thanksgiving. Benchmarks rose in Japan, Australia and South Korea. They rose in Hong Kong but fell in Shanghai. Oil prices fell.

“A headwind for Asian markets is the COVID situation in China, where investors seem to be avoiding local assets and commodities as the country is seeing near-record numbers of COVID cases. Broad restrictions will keep weighing on risk sentiment and macroeconomic fundamentals, putting pressure on the outlook for cyclical stocks and commodities,” Anderson Alves at ActivTrades said in a commentary.

Japan's benchmark Nikkei 225 jumped 1.0% to finish at 28,383.09. Australia's S&P/ASX 200 added 0.1% to 7,241.80. South Korea's Kospi gained nearly 1.0% to 2,441.33. Hong Kong's Hang Seng rose 0.6% to 17,626.00, while the Shanghai Composite fell 0.3% to 3,089.31.

Stocks closed broadly higher on Wall Street after minutes from the Federal Reserve's most recent policy meeting showed central bank officials agreed that smaller rate hikes would likely be appropriate “soon.”

That suggests policymakers are seeing signs that inflation may be cooling as the economy slows with more costly borrowing.

The S&P 500 rose 0.6% to 4,027.26, while the Dow Jones Industrial Average gained 0.3% to 34,194.06. The Nasdaq composite closed 1% higher to 11,285.32.

The Russell 2000 index of smaller companies edged higher, adding 0.2% to close at 1,863.52.

Long-term Treasury yields fell. The yield on the 10-year Treasury, which influences mortgage rates, slipped to 3.69% from 3.76%.

At...