Asian stocks opened in green on Tuesday, gaining for the first time in four days after People's bank of China announced reducing interest rates.
Shanghai rose 4.68 points rising 0.14%, trading at 3,372.26 while Japans’ Nikkei rose 202.36 points or 0.54%, reaching 37,700.99. Hong Kong’s Hang Seng followed the suit, reaching 23,555.9, with a gain of points 223.18 or 0.96%. South Korean Kospi reached 2607.83, up 4.41 points or 0.17% at 8.00 am IST.
Asian markets rose on a wave of investor optimism after China’s central bank announced cuts to key lending rates, reinforcing expectations of looser monetary policy to support the country’s faltering economy.
The People's Bank of China trimmed the one-year loan prime rate (LPR), a benchmark for business and household loans by 10 basis points to 3.0%, while the five-year LPR, which is closely tied to mortgage lending, was also reduced by the same margin to 3.5%.
The move follows recent decisions by five of China’s largest state-owned banks to lower their deposit interest rates, a coordinated effort aimed at boosting economic activity and easing the financial strain on banks.
Together, the measures signal a broader push by Beijing to stabilise growth through more accommodative monetary policy while cushioning bank margins in a challenging economic climate.
Meanwhile, the US stocks, bonds, and the dollar remained mostly steady after an early dip, as investors took in fresh concerns about the country’s growing debt. Moody’s Ratings downgraded the US government’s credit outlook, becoming the last of the three major agencies to say it no longer deserves the highest “Aaa” rating.
Despite the news, the S&P 500 rose slightly by 0.1%, the Dow Jones gained 137 points (0.3%), and the Nasdaq barely moved. Moody’s highlighted that continued heavy borrowing and political gridlock in Washington are making it harder to control the country’s rising debt.
Similar downgrade were also announced by S&P in 2011 and Fitch in 2023. Analysts say the move could push up yields on US Treasuries, potentially increasing borrowing costs for the federal government.
Shanghai rose 4.68 points rising 0.14%, trading at 3,372.26 while Japans’ Nikkei rose 202.36 points or 0.54%, reaching 37,700.99. Hong Kong’s Hang Seng followed the suit, reaching 23,555.9, with a gain of points 223.18 or 0.96%. South Korean Kospi reached 2607.83, up 4.41 points or 0.17% at 8.00 am IST.
Asian markets rose on a wave of investor optimism after China’s central bank announced cuts to key lending rates, reinforcing expectations of looser monetary policy to support the country’s faltering economy.
The People's Bank of China trimmed the one-year loan prime rate (LPR), a benchmark for business and household loans by 10 basis points to 3.0%, while the five-year LPR, which is closely tied to mortgage lending, was also reduced by the same margin to 3.5%.
The move follows recent decisions by five of China’s largest state-owned banks to lower their deposit interest rates, a coordinated effort aimed at boosting economic activity and easing the financial strain on banks.
Together, the measures signal a broader push by Beijing to stabilise growth through more accommodative monetary policy while cushioning bank margins in a challenging economic climate.
Meanwhile, the US stocks, bonds, and the dollar remained mostly steady after an early dip, as investors took in fresh concerns about the country’s growing debt. Moody’s Ratings downgraded the US government’s credit outlook, becoming the last of the three major agencies to say it no longer deserves the highest “Aaa” rating.
Despite the news, the S&P 500 rose slightly by 0.1%, the Dow Jones gained 137 points (0.3%), and the Nasdaq barely moved. Moody’s highlighted that continued heavy borrowing and political gridlock in Washington are making it harder to control the country’s rising debt.
Similar downgrade were also announced by S&P in 2011 and Fitch in 2023. Analysts say the move could push up yields on US Treasuries, potentially increasing borrowing costs for the federal government.
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