Asian stocks mixed after China’s policy rate cut and Japan’s GDP rise

BANGKOK (AP) — Stocks were mixed in Asia on Monday after China’s central bank cut a key interest rate and Japan reported its economy grew at a faster pace last quarter.

Tokyo and Sydney rose while Hong Kong, Shanghai and Bangkok fell. US futures rose slightly on Monday as oil prices fell.

The People’s Bank of China cut its rate on a one-year loan to 2.75% from 2.85% and pumped another 400 billion yuan ($60 billion) into loan markets after government data showed the factory production and July retail sales weakened.

Beijing is aiming to shore up sluggish economic growth at a politically sensitive time when President Xi Jinping is reportedly trying to extend his grip on power.

The ruling Communist Party effectively acknowledged last month that it could not meet this year’s official growth target of 5.5% after anti-virus measures disrupted trade, manufacturing and government spending. consumption. A crackdown on corporate debt has plunged activity in the broad real estate sector.

Meanwhile, Japan reported that its economy grew at a rate of 2.2% in April-June from a year earlier as consumer spending rebounded as COVID-19 restrictions were lifted.

Tokyo’s Nikkei 225 gained 1% to 28,830.90 and the S&P/ASX 200 in Sydney climbed 0.4% to 7,061.81. The Shanghai Composite index edged down 0.1% to 3,274.19, while Hong Kong’s Hang Seng index fell 0.2% to 20,135.75.

South Korean markets were closed for a holiday.

The Bangkok SET index edged down 0.1%. The Thai government said the economy grew at a quarterly pace of 0.7% in April-June, slowing from 1.1% growth in the first quarter of the year.

Tourism has rebounded after two years of tight controls to combat COVID-19, but only to around a quarter of the pre-pandemic level.

“The outlook for the rest of the year will largely depend on how quickly tourism recovers,” Gareth Leather of Capital Economics said in a commentary.

On Friday, Wall Street capped off a choppy week of trading with a broad rally, as the S&P 500 posted its fourth consecutive weekly gain.

The benchmark closed 1.7% higher at 4,280.15 for a weekly gain of 3.3%. The S&P 500 hadn’t posted such a strong streak since November.

The Dow Jones Industrial Average rose 1.3% to 33,761.05, while the Nasdaq gained 2.1% to 13,047.19. The Russell 2000 Small Business Index added 2.1% to 2,016.62.

Major indexes rose sharply on Wednesday after a report showed inflation fell more than expected last month. Another report on Thursday showed that wholesale inflation also slowed more than expected.

They have raised hopes among investors that inflation may be close to a peak and that the Federal Reserve may ease interest rate hikes, its main inflation-fighting tool.

The aggressive pace of rate hikes has investors worried that the Fed could drag the economy into a recession.

The 10-year Treasury yield fell to 2.84% from 2.88% on Thursday evening. It remains below the two-year yield. This is an unusual reversal of the expectation that borrowing money for a longer period should cost more than a shorter period. When investors demand a higher yield in the short term like 2 years than a longer one like 10 years, some investors see it as a reliable signal of an impending recession. The economy has already contracted for two consecutive quarters.

This week, the Commerce Department releases its retail sales report for July and retail giant Walmart releases its latest financial results.

Investors can also gauge the health of the housing market when they receive a home sales report for July and the latest earnings from Home Depot.

In other trading on Monday, the benchmark U.S. crude lost 82 cents to $91.27 a barrel in electronic trading on the New York Mercantile Exchange. It lost $2.25 a barrel on Friday.

Brent crude, the price basis for international trade, fell 83 cents to $97.32 a barrel.

The US dollar slipped to 133.28 Japanese yen from 133.43 yen. The Euro weakened to $1.0249 from $1.0261.

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