SNP China Petroleum and Chemical Corp

By Gregor Stuart Hunter 

Asian stocks rose Wednesday, hours before the U.S. Federal Reserve is expected to raise interest rates for the first time since 2006.

Japan's Nikkei Stock Average rose 2.5%, South Korea's Kospi gained 2.1% and the Australian S&P/ASX 200 rose 2%.

Chinese stocks also rose, with the Shanghai Composite up 0.7% and the smaller Shenzhen market up 1.1%. In Hong Kong, the Hang Seng Index rose 2.2% while the Hang Seng China Enterprises Index, a gauge of Chinese companies with Hong Kong listings, rose 2.8%.

Chinese energy stocks led the gains, after officials said Tuesday they would temporarily stop adjusting domestic gasoline and diesel prices, which could raise costs for consumers

In Hong Kong, China Petroleum & Chemical Corp., also known as Sinopec, rose 10.1% and PetroChina Co. gained 6.1%.

Short bets on oil stocks, when investors borrow shares to book a profit if stocks fall, had built up over the year as crude prices fell. Even if just a small portion of these start unwinding, "that's going to be enough to move markets in and of themselves," said Angus Nicholson, a market strategist at IG.

Traders are also taking positions before the U.S. Energy Information Administration releases its oil inventory data later Wednesday, he added. The market expects a slowing pace in drawdowns of crude-oil stocks compared with the previous week.

Overnight gains for oil prices receded during Asia trading. West Texas Intermediate crude futures fell 0.7% to $37.09 a barrel and Brent crude, the international benchmark, fell 0.4% to $38.59.

In corporate news, Singapore-listed Noble Group Ltd. shares jumped as much as 12.8% after announcing that it is in talks with potential buyers for its 49% holding in its agricultural-commodities unit. Chinese state-backed grain trader Cofco, which bought a 51% stake in the unit last year for $1.5 billion is among the bidders for the remaining shares, The Wall Street Journal reported.

Noble shares were last up 7.7% but remain down 63% year-to-date amid accusations of accounting irregularities by an anonymous research group. The company recently said it was seeking asset sales to help repair its balance sheet.

In Hong Kong, Prada SpA shares plunged 8.1% in Hong Kong after the luxury retailer posted a 26% drop in net profit for the first nine months of the year.

Elsewhere in Asia, markets are awaiting the outcome of the Federal Reserve's meeting.

"We do not think the Fed will be distracted by recent U.S. credit-market stress," economists from Standard Chartered wrote in a research report, referring to deep selloff in the U.S. high-yield debt market in recent days, which eased Tuesday. "The bar for the Fed not to hike is sizable...market volatility has stayed contained and stocks have remained resilient."

Prices of fed-funds futures reflect an 81% probability that the central bank will begin raising rates after its meeting concludes later Wednesday, according to data from CME Group.

Gold prices were last up 0.2% at $1,063.90 a troy ounce.

The U.S. dollar index, which tracks the strength of the dollar against a basket of currencies, ticked down 0.1% to 98.09.

Write to Gregor Stuart Hunter at gregor.hunter@wsj.com

(END) Dow Jones Newswires

December 15, 2015 23:53 ET (04:53 GMT)

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