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Asian markets rose Thursday, led by Hong Kong after the city's traders extended an impressive start to the year thanks to optimism over China's reopening and officials there making key policy changes to encourage investment.
Oil prices also staged a mild rebound but remain under pressure after losing around nine percent in the previous two days owing to demand concerns.
Asia's advance tracked a rally on Wall Street, which came even as minutes from the Federal Reserve's December meeting showed officials intended to keep lifting rates to fight decades-high inflation.
The upbeat mood has been boosted by signs that China is implementing policy changes to make it a more attractive investment location.
A decision allowing Ant Group to raise $1.5 billion in funding was seen as an indication that authorities' long-running crackdown on the tech sector could be coming to an end, and fresh measures to support the struggling property sector have also been unveiled.
Reports that Beijing was considering lifting a two-year ban on some imports of Australian coal, as well as a slight thawing of ties with Washington, were also providing some hope for the year ahead.
That all comes against the backdrop of the rollback of the country's harsh zero-Covid policy, which had sapped economic growth since the start of the pandemic.
The move has fanned hopes that the world's second-largest economy will bounce back after three years of lockdowns and tough restrictions, though the surge in infections in recent weeks has also raised concerns about the near-term outlook.
"The medium-term prospects still appear quite bullish, especially if China can bounce back strongly later this year and fully transition to living with Covid, like much of the rest of the world," said analyst Craig Erlam.
Hong Kong rose more than one percent to a six-month high, while Shanghai, Tokyo, Singapore, Sydney, Seoul, Wellington, Taipei and Manila also climbed.
However, London, Paris and Frankfurt opened down.
Crude prices rose but were still well down on the week, as demand outlook remains weak owing to China's Covid crisis keeping people at home and Europe's mild winter lowering energy use.
In a sign that the energy crisis may be easing, natural gas prices in Europe are at their lowest levels since November 2021, wiping out the rises seen after Russia's invasion of Ukraine.
Traders are now awaiting the release of US jobs data at the end of the week, which will give the latest snapshot of the world's top economy after almost a year of Fed rate hikes and surging inflation.
The Fed minutes released Wednesday showed officials intend to keep hiking rates and would not ease policy until prices are under control, keeping traders on edge that the central bank will tip the economy into recession.
However, Joe Gilbert at Integrity Asset Management said: "The Fed wanted to send a message to the market that they would not be easing or cutting rates anytime in 2023.
"However, we must remember that the Fed also did not forecast raising rates by 400 basis points twelve months ago, so their forecasting ability of their own actions (raises questions)."
Key figures around 0820 GMT
- Tokyo - Nikkei 225: UP 0.4 percent at 25,820.80 (close)
- Hong Kong - Hang Seng Index: UP 1.3 percent at 21,052.17 (close)
- Shanghai - Composite: UP 1.0 percent at 3,155.22 (close)
- London - FTSE 100: DOWN 0.2 percent at 7,569.30
- West Texas Intermediate: UP 0.9 percent at $73.48 per barrel
- Brent North Sea crude: UP 0.8 percent at $78.48 per barrel
- Dollar/yen: DOWN at 132.50 yen from 132.67 yen on Wednesday
- Euro/dollar: DOWN at $1.0604 from $1.0611
- Pound/dollar: DOWN at $1.2010 from $1.2055
- Euro/pound: UP at 88.31 pence from 87.94 pence
- New York - Dow: UP 0.4 percent at 33,269.77 (close)