SINGAPORE — Shares in Asia-Pacific rose in Wednesday trade, as investors watch for developments around the Covid situation in China as well as the upcoming rate decision by the U.S. Federal Reserve.

Chinese stocks recovered partially after they led losses among Asia-Pacific markets yesterday. In early trade, Hong Kong’s Hang Seng index surged 3.56%.

Mainland China’s Shanghai composite also jumped 1.64% while the Shenzhen component advanced 1.92%.

On Tuesday, the Hang Seng had tumbled nearly 6% to close at its lowest since Feb. 2016. That comes as China grapples with its most severe Covid outbreak since the height of the pandemic in 2020, with major cities scrambling to limit business activity.

In Japan, the Nikkei 225 climbed 1.36% while the Topix index gained 1.4%. South Korea’s Kospi advanced 0.68%.

Australia’s S&P/ASX 200 rose 1.01%. MSCI’s broadest index of Asia-Pacific shares outside Japan traded 1.49% higher.

Oil prices were higher in the morning of Asia trading hours of Wednesday, after tumbling on Tuesday, continuing its recent fall.

International benchmark Brent crude futures gained 1.07% to $100.98 per barrel. U.S. crude futures also rose, climbing 0.79% to $97.20 per barrel.

Overnight stateside, the Dow Jones Industrial Average jumped 599.10 points, or 1.82%, to 33,544.34. The S&P 500 index climbed 2.14% to 4,262.45 while the tech-heavy Nasdaq Composite surged 2.92% to 12,948.62.

The U.S. Federal Reserve is set to announce its latest interest rate decision Wednesday stateside. The central bank is widely expected to raise rates by a quarter point, its first hike since 2018.

Meanwhile, the Russian state is due to pay $117 million in interest on two sovereign eurobonds on Wednesday, the first of four payment dates to creditors in March alone as the country faces the prospect of defaulting on its debt. That comes after international sanctions on Russia’s central bank have blocked off a substantial portion of the country’s foreign exchange reserves following Russia’s invasion of Ukraine.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.946 — still above levels below 98 seen last week.

The Japanese yen traded at 118.29 per dollar, still weaker as compared with levels below 116.1 seen against the greenback last week. The Australian dollar was at $0.7191 after recently slipping from above $0.72.

— CNBC’s Elliot Smith contributed to this report.