Asian, US stock markets rebound on good news


HONG KONG: Asian markets mostly climbed on Wednesday as dealers welcomed another batch of strong US data, while China’s central bank said that it had moved to ease a liquidity crisis that has gripped the country’s financial markets.

Traders breathed a sigh of relief after the People’s Bank of China (PBoC) late on Tuesday said that it had provided cash to some firms in a bid to prevent a cash crunch that had sent shares into a tailspin.

But Shanghai still fell 0.46 percent in early trade as investors remained on edge.

However, elsewhere stocks were up. Tokyo climbed 1 percent, Hong Kong added 1.18 percent, Sydney was 1.70 percent higher and Seoul put on 0.38 percent.

Global markets—already reeling after the US Federal Reserve last week indicated that it would soon begin to wind up its stimulus—sank as China’s lenders were hit by a credit squeeze, stoking concerns for its wider economy.

The PBoC had as recently as Monday ruled out providing fresh cash and ordered banks to put their financial houses in order.

But on Tuesday, it said in a statement it had offered funds to some financial institutions in recent days and would continue to do so.

The move came after a central bank official said earlier on Tuesday that it would “guide market interest rates [that banks charge to lend to each other]into a reasonable range.”

Interbank rates surged late last week but have since eased.

In New York City, Wall Street’s three main indexes enjoyed a positive day, thanks to data showing more strength and confidence in the US economy and as worries over China abated.

Figures showed new orders for durable goods surged 3.6 percent in May on the back of aircraft sales, while house prices rose a huge 2.5 percent in one month. In addition, the Conference Board’s consumer confidence index jumped to 81.4, up from 74.3 in May.

The Dow rose 0.69 percent, the S&P 500 added 0.95 percent and the Nasdaq was 0.82 percent higher.

While the news will increase expectations the Fed will start to scale back its bond-buying to support the economy, it also shows it is gaining strength.

After weeks of selling in spite of signs of stronger growth, “we may be at a point where good news is good news,” said Art Hogan of Lazard Capital Markets in the US.

The figures also lent support to the dollar, which rose to 98.05 yen from 97.80 yen in New York City late on Tuesday. The euro bought $1.30777 and 128.22 yen against $1.3083 and 127.95 yen.

Oil prices fell, with New York City’s main contract, light sweet crude for delivery in August down 32 cents to $95 a barrel while Brent North Sea crude for August delivery shed 20 cents to $101.06 in morning trade.


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