Asian markets rise after China rate cut, US data

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HONG KONG: Asian markets rose Monday after China at the weekend cut interest rates for the second time since November, while better-than-forecast US economic data helped push the dollar up against the yen.

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Investors will also be watching several key events this week, including political gatherings in China, a meeting of the European Central Bank and the release of US jobs figures.

Shanghai added 0.79 percent, or 25.99 points, to close at 3,336.29 and Hong Kong advanced 0.26 percent, or 64.15 points, to 24,887.44.

Tokyo climbed 0.15 percent, or 28.94 points to end at 18,826.88, Seoul closed 0.55 percent higher, putting on 11.01 points to 1,996.81, and Sydney gained 0.51 percent, or 30.12 points, to 5,958.88.

The People’s Bank of China on Saturday cut interest rates by 25 basis points, citing “historically low inflation” among the factors behind its decision.

The move is the latest aimed at helping the economy regain its lustre after it grew in 2014 at the slowest pace since 1990. Last month the central bank cut the percentage of funds banks must hold in reserve to try to boost lending.

“China’s interest rate cut was a bit of a surprise,” Jitra Amornthum, the head of research at Finansia Syrus Securities, told Bloomberg News.

But Jitra said most investors had expected some form of additional stimulus “as the economic recovery is very weak”.

The rate cut comes just ahead of the start Thursday of the annual meeting of China’s rubber-stamp legislature, the National People’s Congress, at which Premier Li Keqiang is expected to deliver an address on the state of the economy.

Saturday’s announcement was followed the next day by official data showing the country’s manufacturing sector shrank for a second straight month in February.

Buying was also helped by news that the US economy grew 2.2 percent in the last quarter of 2014, slower than the 2.6 percent first estimated but not as slow as the 2.1 percent forecast.

US data lifts dollar
The news lifted the dollar, which bought 119.80 yen in Tokyo Monday, against 119.63 yen in New York and well up from 119.17 yen in Tokyo earlier Friday.

The euro bought $1.1181 and 133.94 yen, compared with $1.1195 and 133.93 yen in US trade.

However, Wall Street’s main indexes still retreated.

The S&P 500 slipped 0.30 percent Friday but still managed to record its best month since October 2011, putting on 5.5 percent. The Dow eased 0.45 percent and the Nasdaq fell 0.49 percent.

Oil retreated after enjoying steep gains Friday, with some analysts suggesting prices have bottomed out after hitting six-year lows in January.

US benchmark West Texas Intermediate for March delivery fell 63 cents to $49.13 while Brent crude for April was down 57 cents to $62.01.
Gold fetched $1,219.02 against $1,206.45 late Friday.

In other markets:

— Taipei fell 0.22 percent, or 20.74 points, to 9.601.36.

Taiwan Semiconductor Manufacturing Co was 1.0 percent lower at Tw$149.0 while Hon Hai Precision Industry was unchanged at Tw$87.1.

— Wellington rose 0.24 percent, or 14.20 points, to 5,892.67.

Air New Zealand was up 1.75 percent at NZ$2.90 while Fletcher Building slipped 0.12 percent to NZ$8.63.

— Manila closed 0.56 percent higher, adding 43.35 points to 7,773.92.
Philippine Long Distance Telephone fell 1.96 percent to 3,100 pesos.

AFP

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