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Monday February 6th, 2023 8:35PM

Asian stocks mixed after China promises to boost growth

By The Associated Press
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BEIJING (AP) — Asian stock markets were mixed Tuesday after China promised to speed up the rollout of policy changes to boost anemic economic growth and Australia's central bank raised its benchmark interest rate.

Shanghai, Tokyo and Seoul gained while Hong Kong declined.

The Chinese Cabinet's planning agency promised Monday to accelerate easier lending and other policies but announced no new spending. Economic growth sank to 2.5% over a year earlier in the first half, less than half the official annual target.

The announcement might “provide a short-term uplift” to sentiment, but investors “ultimately want to see a stronger recovery," said Yeap Jun Rong of IG in a report.

The Shanghai Composite Index gained 1.1% to 3,235.57 while the Nikkei 225 in Tokyo added 0.1% to 27,643.06. The Hang Seng in Hong Kong shed 0.2% to 19,177.70.

Sydney’s S&P-ASX 200 lost 0.3% to 6,833.80 after Australia's central bank raised its benchmark lending rate by 0.5 percentage points to 2.35%, its highest level since 2015, and said more rate hikes were planned.

Investors worry repeated rate hikes by the U.S. Federal Reserve and central banks in Asia and Europe to cool inflation that is at multi-decade highs might derail global economic growth. Central banks say they must slow business and consumer activity to get prices under control.

The Kospi in Seoul advanced 0.2% to 2,408.55 while India's Sensex opened down less than 0.1% at 59,230.54. New Zealand retreated while Southeast Asian markets gained.

U.S. markets were closed Monday for a holiday.

European markets sank following Friday's announcement by Russian gas giant Gazprom that a suspension of supplies through the Nord Stream 1 pipeline would be extended indefinitely. That adds to shortages in Germany and other economies.

The deputy director of China's National Development and Reform Commission, Yang Yinkai, said the agency will “speed up the release of policy effectiveness" to “make up for losses caused by the epidemic in the second quarter,” according to news reports.

The government has trimmed interest rates, given entrepreneurs a break on rent and promised other aid to revive the economy after Shanghai and other industrial centers temporarily shut down to fight virus outbreaks. But it is avoiding major spending, possibly for fear of reigniting a rise in housing costs and debt that Chinese leaders worry is dangerously high.

Also Monday, Beijing freed up more foreign currency holdings of Chinese commercial banks for lending and trading by lowering the amount they must hold in reserve. The move rolls back an increase imposed last year to limit speculative trading and restrain the rise of the exchange rate of China's yuan, which has since declined.

In energy markets, benchmark U.S. crude gained $1.78 to $88.65 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, lost 70 cents to $95.04 per barrel in London.

The dollar advanced to 141.12 yen from Monday's 140.46 yen. The euro gained to 99.55 cents from 99.31 cents.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy, AP Business - Financial Markets, AP Business - Industries, AP Business - Financial Services, AP Business - Utilities
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