BEIJING — Asian stock markets rose Thursday after China cut interest rates to shore up flagging economic growth and Japan reported a double-digit rise in exports.
The Shanghai Composite Index
SHCOMP,
rose 0.3% and the Hang Seng
HSI,
in Hong Kong advanced 2.3%.
The Nikkei 225
NIK,
in Tokyo gained 0.9% after December exports rose 17.5% over a year earlier. Growth in auto exports accelerated to 17.5% from November’s 4.1%.
The Kospi
180721,
in Seoul added 0.6% while Sydney’s S&P/ASX 200
XJO,
lost 0.1%. Benchmark indexes in Taiwan
Y9999,
and Malaysia
FBMKLCI,
declined while Singapore
STI,
and Jakarta
JAKIDX,
advanced.
The Chinese central bank cut rates on one- and five-year loans after growth in the world’s second-largest economy sank to 4% over a year earlier in the latest quarter following a crackdown on surging debt among real estate developers.
“The question remains whether banks will respond by increasing lending,” said Iris Pang of ING in a report. Amid uncertainty about heavily indebted developers, Pang said, “banks will be picky about who they lend to.”
On Wall Street, the benchmark S&P 500 index
SPX,
fell 1% on Wednesday as investors tried to figure out how fast the Federal Reserve will roll back economic stimulus to cool inflation.
The Dow Jones Industrial Average
DJIA,
retreated 1% to 35,028.65. The Nasdaq composite
COMP,
,
dominated by technology stocks, lost 1.1% to 14,340.26. The index is 10.7% below its Nov. 19 all-time high.
The market “succumbed to renewed fears of inflation/Fed tightening,” Vishnu Varathan of Mizuho Bank said in a report.
Stocks have slid since Fed officials said in mid-December it plans to wind down bond purchases and other stimulus that are boosting share prices would be accelerated due to the spike in U.S. inflation to a four-decade high.
Late Tuesday, investors were pricing in a better than 86% probability the Fed will raise short-term rates at its March meeting, according to CME Group. That is up from 47% a month ago.
On Wednesday, President Joe Biden called on the Fed to do more to fight inflation.
“Given the strength of our economy, and the pace of recent price increases, it’s important to recalibrate the support that is now necessary,” Biden said at a news conference.
Investors are watching the latest round of corporate earnings for indications inflation might be cutting into profits.
Household and consumer goods company Procter & Gamble rose 3.4% after reporting strong financial results. The company said consumers have been willing to pay higher prices for dish detergent,…
Read More: Asian markets rise after China cuts rates, Japan exports gain again