Asian stock markets closed in positive territory, taking cues from a positive finish in Wall Street overnight after the Federal Reserve raised its target federal funds rate to a range of 0.25 to 0.5 percent.
"Asset markets saw the Fed as giving a good enough combination of confidence in activity and promise of future restraint that investors were relieved and pleased," Steven Englander, Citi's global head of G10 foreign-exchange strategy, said in a note. "(The Fed's) comments that they were hiking because they thought the economy was strong enough were far more powerful than saying that their hiking was so tentative that they would wait a good long time before doing it again."
This was the first time the Federal Reserve raised its interest rates since June 29, 2006. Wall Street had widely expected the move and investors will be watching closely for clues about the timeline of future rate hikes.
The gains in Asia's equity markets came despite analyst concerns that higher U.S. rates might weigh on the region's shares.
Simon Male, head of Asian equities at Auerbach Grayson, told CNBC that the Fed's move was well-telegraphed to markets and Asia markets had already fallen throughout the year in anticipation.
"You saw a lot of money moving out of emerging markets in anticipation of better returns in the U.S. and that's the reason why Asia was down so heavily in the last year," Male said. But he noted that while Asia's growth picture is "not that great," he added, "valuations have come back to very reasonable levels. You're looking at Asian markets trading about 11 times forward earnings and with a very nice 3 percent yield as well."