Asian stocks surge as bank fears ease before Fed meeting

Asian stock markets rose on Wednesday as investors flocked to bargain financial companies amid lessening banking crisis worries. Attention is now fully on a Federal Reserve interest rate decision later in the day.

One of the top performers for the day was Japan’s Nikkei 225, which increased by more than 2% in catch-up trading as big banking firms soared. Focus this week is also on Japanese consumer inflation data due on Friday, which is expected to factor into the Bank of Japan’s stance on monetary policy.

Other bank-heavy indices also rose, with the ASX 200 in Australia rising 0.9% and the Nifty 50 and BSE Sensex 30 indexes in India both rising 0.2%.

The Hang Seng index in Hong Kong increased by 2.1%, the KOSPI in South Korea by 0.9%, and the Taiwan Weighted index by 1.3%. These indices are heavily weighted in technology.

Regional stocks largely tracked overnight gains on Wall Street, as U.S. indexes surged on hopes that the worst of a potential bank crisis was over. Government intervention in the sector, including emergency liquidity measures and mergers, helped increase confidence in the banking sector. U.S. financial stocks also rallied in overnight trade, while European shares gained in the prior session.

Optimism over stability in the banking system helped markets gain ahead of a Federal Reserve interest rate decision later in the day, with markets pricing in an over 80% chance that the central bank will hike rates by 25 basis points.