SYDNEY, NSW, Australia - Asian markets moved higher on Wednesday following major gains on U.S. markets overnight.
The Reserve Bank of New Zealand, however, caught Kiwi traders off guard with a record interest rate hike of 75 basis points, taking the official rate from 3.50 to 4.25 percent. Concerned about inflation, currently running at 7.25 percent, the Reserve Bank is seemingly now prepared to bring on a recession to tame it.
"Inflation is no one's friend, and in order to rid the country of inflation, we need to reduce spending levels," RBNZ Governor Adrian Orr told a press conference Wednesday. "That means that we will have a period of negative GDP growth."
While other markets in the region were rallyng, the S&P/NZX 50 dived 96.62 points or 0.85 percent to 11,232.80.
Across the Tasman, the Australian All Ordinaries advanced 46.00 points or 0.62 percent to 7,422.40.
In Japan, the Nikkei 225 gained 170.95 points or 0.61 percent to 28,115.74.
South Korea's Kospi Composite added 10.89 points or 0.45 percent to 2,416.66.
The Hang Seng increased 99.40 points or 0.57 percent to 17,523.81.
China's Shanghai Composite rose 7.96 points or 0.26 percent to 3,096.91.
On foreign exchange markets, the New Zealand dollar starred with a jolt higher following the RBNZ move. The Kiwi last traded at 0.6176 around the Sydney close Wednesday. The Australian dollar increased to 0.6652.
The euro was stronger at 1.0331. The British pound firmed to 1.1894.
The Japanese yen was in demand at 141.24. The Swiss franc firmed to 0.9505.
Overnight on Wall Street, all the major indices made solid ground. The Nasdaq Composite jumped 149.90 points or 1.36 percent to 11,174.41.
The Standard and Poor's 500 rose 53.64 points or 1.36 percent to 4,003.58.
The Dow Jones climbed 397.82 points or 1.18 percent to 34,098.10