Asian stocks climb after China rate cut

[george]

Asian stocks climb after China rate cut
Published: 24 Nov 2014 at 16.36

HONG KONG — Asian markets rallied Monday after China's surprise move last week to cut interest rates for the first time in more than two years as its leaders try to strengthen growth.

The euro struggled following a sell-off Friday in response to comments from the head of the European Central Bank hinting at further stimulus measures to fight off deflation.

Shanghai rose 1.85%, or 46.09 points, to end at 2,532.88 while Hong Kong closed up 1.95%, or 456.02 points, at 23,893.14.

Sydney added 1.08%, or 57.5 points, to 5,361.8, Seoul ended 0.7% higher, tacking on 13.70 points to 1,978.54 and Manila rose 0.69%, or 50.41 points, to close at 7,326.59.

Tokyo was closed for a public holiday.

China's central bank on Friday evening announced it would slash its one-year rate for deposits by 25 basis points to 2.75%, and its one-year lending rate by 40 basis points to 5.6%, both effective Saturday.

The move -- the first cut since July 2012 -- followed a series of disappointing data from the world's number two economy, a key driver of global growth.

Last week banking giant HSBC said its index of manufacturing activity in China showed the sector had stagnated in November, while other data on trade and industrial output have also highlighted weakness.

"This provides confidence that growth won't fall below 7%," said Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors.

"Some of the rally this year has been a removal of cheap valuations. The next leg of the rally will probably come from confidence that growth is not going to collapse," Mr Oliver told Dow Jones Newswires.

Also providing buying support was a suggestion from ECB head Mario Draghi that he is ready for further stimulus to boost the flagging eurozone economy.

He told a banking congress Friday the ECB "will use all means available to us, within our mandate, to return inflation towards our objective -- and without any undue delay".

Among the measures being considered are the large-scale purchase of government bonds -- known as quantitative easing -- similar to that undertaken by the Bank of Japan and recently wound down by the US Federal Reserve.

The bank is struggling to fend off deflation in the currency bloc with inflation currently at just 0.4%, well below the ECB target of 2%.

Mr Draghi's comments hit the euro, which fell to 145.91 yen and $1.2405 late Friday from 147.81 yen and $1.2553 beforehand. In Asian trade Monday it was sitting at 146.12 yen and $1.2396.

The dollar bought 117.84 yen against 117.63 yen Friday.

-- (c) Copyright AFP 2014-11-24

[Krataiboy]

Here we go again. More funny money for the bankers to play with. How many Euros out of a hundred are actually backed by real assets? Last week it was about three - and that's before Draghi announced the latest stimulus (sic) package, which won't stimulate anything other the banks' gambling instincts.

The global debt bubble is ballooning out of control and the engines of growth - the US, China, Japan and Germany - are all running out of steam. Never mind Thailand - the whole bloody shooting match is about to unwind and this time nobody will escape the fall-out.

[benj005]

Here we go again. More funny money for the bankers to play with. How many Euros out of a hundred are actually backed by real assets? Last week it was about three - and that's before Draghi announced the latest stimulus (sic) package, which won't stimulate anything other the banks' gambling instincts.

The global debt bubble is ballooning out of control and the engines of growth - the US, China, Japan and Germany - are all running out of steam. Never mind Thailand - the whole bloody shooting match is about to unwind and this time nobody will escape the fall-out.

Cameron warned last week that the world is on verge of a financial collapse. ,

[lovelomsak]

I amnot a scholar nor a financial wizard. Also not well informed. But I have this constant feeling that governments are constantly making money so as to avoid war. If major players run out of money what can they do. War has always been a constant for rebuilding economies.I amnot talking small wars like what the US is always in , but a big one between major powers. Leaders are going where their predecessors never had to go. Its all quess work. They have no quidelines. In the past there would have been a war long before now.

I see most of the wars the US are in, are with oil rich countries. Fuel is the number one product a military needs at times of war,maybe the US is always making sure if war does come they are in a position to meet their fuel demands.

Perhaps they should look at doing away with the gold standard. And look at natural resources.and switch the power to countries who can base their dollars worth on natural resources. This is something that can be bought yes same as gold but only from those who have it. The shear fact a country with vast natural resources in a shrinking world is the most valuable and should give them more power in what happens in these new times and perhaps stabilise economies. But then of course we are back to the war for borders.

If the world went the way of natural resource based dollars. America would then be also in a good position because of their neighbours to the north Canada,are resource rich.