Asian stocks rose on Wednesday following reports of Chinese stimulus and amid hopes that the Federal Reserve will maintain its dovish policy stance. On Tuesday, Chinese website Sina said the Peoples Bank of China (PBOC) injected $82 billion into the countrys five largest banks. Many investors were anticipating some form of stimulus form the central bank following a spate of recent weak economic data. If this [report] is confirmed, it essentially means the PBOC is undertaking QE (quantitative easing); it is printing money and giving capital to the banks in the hope they will lend it on. It isnt as aggressive as the Q2 program which saw the PBOC relaxing the reverse ratio and increase disbursements to rural and co-op banks. However, it is still a stimulus measure and one that has a broader reach in that this is the first time the largest banks in China have seen a handout in 2014, said Evan Lucas, market strategist at IG, in a note. Later Wednesday, the Fed ends a two-day policy meeting. Many experts were bracing for more hawkish language, but a shift in expectations occurred overnight after Wall Street Journal journalist Jon Hilsenrath argued that the Fed wouldnt make any major change in its statement. Japanese shares resumed gains after snapping a five-day winning streak on Tuesday. The benchmark Nikkei traded in sight of the 16,000 level, moving closer to Fridays eight-month high. South Korean shares rose to their highest level in nearly two weeks, tracking Asia-wide gains. CNBC N225 15936.99 (+25.46) KS200 263.47 (+2.02) (Prices on Reuters at 0111GMT)
Posted on: Wed, 17 Sep 2014 01:12:05 +0000
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