Asian markets extended gains Wednesday, tracking a rally in New York, on optimism that the Federal Reserve's plan to hike interest rates will help bring inflation under control.

While there remains plenty of concern about the war in Ukraine, analysts said some confidence had seeped back into trading floors as investors bet on consumer resilience and economies continue to reopen.

Fed boss Jerome Powell said Monday that the central bank was prepared to act more aggressively on lifting borrowing costs if inflation -- already at a 40-year high -- does not fall quickly enough.

Officials lifted rates last week by a quarter of a point but some have advocated hikes of half a point, a view Powell suggested he was open to, adding that he was happy the economy was strong enough to withstand such a move.

While the faster and steeper rate of hikes would make it costlier for investors to borrow, commentators said the Fed's stance gave them confidence it could get a grip on prices.

"We are positive for equities for this year," Seema Shah, of Principal Global Investors, told Bloomberg Television.

She added that while the near-term outlook would be challenging with recession risks rising, "we still think the US economy is pretty good fundamentally".

"Faster hikes are clearly going to help inflation come down," which may reduce the need for a longer tightening campaign.

All three main indexes on Wall Street rallied Tuesday, with the Nasdaq piling on two percent.

And Asia took up the baton, with Tokyo jumping three percent and Hong Kong continuing to bask in a tech rally fuelled by China's pledge of support for markets, putting on more than one percent.

Shanghai, Seoul, Sydney, Singapore, Taipei, Manila and Bangkok were also on the front foot, though Mumbai, Jakarta and Wellington dipped.

"The market appears to be unfazed by the risks that have haunted it for the first quarter and appear ready to grind higher with conviction," said market strategist Louis Navellier.

"It appears that the long-awaited reopening trade has finally begun in earnest, despite the baggage of Ukraine and surprisingly high inflation, and may soon draw in a lot of money off the sidelines."

Still, investors continue to keep an eye on developments in the Ukraine war, which is keeping oil prices elevated though they remain stuck just below $120 a barrel.

- Key figures around 0710 GMT -

Tokyo - Nikkei 225: UP 3.0 percent at 28,040.16 (close)

Hong Kong - Hang Seng Index: UP 1.6 percent at 22,246.99

Shanghai - Composite: UP 0.3 percent at 3,271.03 (close)

Brent North Sea crude: DOWN 0.1 percent at $115.36 per barrel

West Texas Intermediate: FLAT at $109.28 per barrel

Dollar/yen: UP at 121.11 yen from 120.82 yen late Tuesday

Euro/dollar: DOWN at $1.1028 from $1.1033

Pound/dollar: UP at $1.3287 from $1.3260

Euro/pound: DOWN at 83.00 pence from 83.16 pence

New York - DOW: UP 0.7 percent at 34,807.46 (close)

London - FTSE 100: UP 0.5 percent at 7,476.72 (close)

dan/leg

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Oil extends rally on Russia embargo talk, stocks rise
Hong Kong (AFP) March 22, 2022
Oil prices extended their rally Tuesday on supply worries as European leaders debated banning imports from Russia, while equities advanced despite a tepid Wall Street lead and the prospect of a sharper hike in US interest rates. Both main crude contracts started the week by soaring more than seven percent Monday as EU nations discussed following Washington and putting an embargo on Russian energy imports over its war in Ukraine. Some members are pushing to ramp up pressure on Russian President V ... read more