Asian shares mostly gain as Wall Street rises
written by Bella PalmerHong Kong's Hang Seng was an exception, declining 0.6 per cent to 20,869.39, but the Shanghai Composite added 0.8 per cent to 3,288.32
Asian shares have opened mostly higher after U.S. stocks rose to records to close out their latest winning week. U.S. futures and oil prices also jumped.
Hong Kong's Hang Seng was an exception, declining 0.6 per cent to 20,869.39, but the Shanghai Composite added 0.8 per cent to 3,288.32. The A-share index of the smaller market in Shenzhen rose 2.2 per cent.
The gains in mainland Chinese markets followed cuts in the one-year and five-year loan prime rates, which are reference rates for lending. Lower rates can help reduce pressure on borrowers, especially property developers that have suffered following a clampdown on excessive borrowing several years ago.
Given that the main constrain is weak demand, the “heavy lifting” will have to come from government spending, Zichun Huang of Capital Economics said in a report. China's Finance Ministry has pledged to ramp up such outlays in coming months, “However, we are still sceptical that fiscal easing will be large enough to deliver anything more than a modest and short-lived pick-up in activity.”
Tokyo's Nikkei 225 index gained 0.3 per cent at 39.078.33, while the Kospi in Seoul soared 0.8 per cent to 2,614.75. Australia's S&P/ASX 200 added 0.7 per cent to 8,340.40.
Oil prices rose after skidding last week as concerns receded that Israel will attack Iranian oil facilities as part of its retaliation for Iran’s attack early this month. Iran is a major producer of crude, and a strike could upend its exports to China and elsewhere. Concerns about the strength of demand from China have also impacted oil prices.
Brent crude, the international standard, rose 31 cents to $73.37 per barrel.
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