Commentary Asian Stocks Advance as China Rate Cut Boosts Optimism: Asian stocks rose today, with a regional gauge heading for its biggest advance this month, after U.S. indexes reached another record as China’s unexpected interest-rate cut stoked optimism in the global economy. The MSCI Asia Pacific excluding Japan Index climbed 1.2 percent to 479.04 today morning in Hong Kong, heading for its biggest advance since Oct. 29. China reduced interest rates last week. China cut benchmark interest rates for the first time since July 2012 as leaders step up support for the world’s second-largest economy. The one-year lending rate was reduced by 0.4 percentage point to 5.6 percent; while the one-year deposit rate was lowered by 0.25 percentages point to 2.75 percent also the European Central Bank and the Bank of Japan in deploying fresh stimulus. That contrasts with the Federal Reserve, which has ended its bond-buying program as the U.S. economy strengthens. ECB President Mario Draghi said Nov. 21 he will do what is necessary to spur inflation. The rally in Chinese shares will continue following the rate cut, Central banks can be aggressive in cutting rates because inflation isn’t an issue. We have been getting surprises from central banks. There’s a good chance we’ll see a move from the ECB soon.
Posted on: Mon, 24 Nov 2014 02:41:54 +0000
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