Asian stocks gained sharply on Friday as sentiment boosted from a move by Chinese banks to lower a key interest rate for long-term loans by a record amount.
Shares in Mainland China, Hong Kong, Thailand and South Korea gained over 1% each. The MSCI Asian Broad Market Index ex Japan dipped by 1.86%.
The move “comes as a big surprise, and is without doubt a positive in terms of raising the market’s sentiment,” said Niu Chunbao, fund manager at Shanghai Wanji Asset Management as reported by Bloomberg. .
The US 10-year Treasury yield advancing to about 2.85%. A dollar gauge trimmed its biggest one-day drop since 2020.
Kansas City Fed President Esther George acknowledged equities were having a “rough” patch but did nothing to soften the US central bank’s hawkish tone.
“Inflationary pressures look very much persistent at the moment,” Lale Akoner, senior market strategist at BNY Mellon Investment Management, said on Bloomberg Television as reported by Bloomberg.
“The biggest risk right now is developed-market central banks might trigger a recession. We are increasingly suspecting that they made a policy mistake.”
Crude oil dipped with the WTI is trading at $110 a barrel and Brent is trading around $111 a barrel.