Equites Climbed Higher on Latest Measures by China to Boost Economy

Asian markets ended the week paring losses after after China’s latest measure to bolster its economy injected a note of optimism at the end of another volatile week for global markets.

Shares in Mainland China, Hong Kong, Japan, Thailand and South Korea closed over 1% each. The MSCI Asian Index ex Japan dropped by 1.86%.

Treasury yields edged higher, and the dollar was steady after its biggest one-day drop since 2020.

Chinese banks lowered the five-year loan prime rate by a record amount in an effort to boost mortgages and loans amid a property slump and Covid lockdowns. The move “is without doubt a positive in terms of raising the market’s sentiment,” said Niu Chunbao, a fund manager at Shanghai Wanji Asset Management as reported by Bloomberg.

“The risk-on trading mood has registered a solid rebound during the last couple of hours as traders cheered the significantly dovish monetary decision from China,” said Pierre Veyret, an analyst at ActivTrades.

“This move significantly contrasts with the lingering inflation and recession risks in Western economies, where an increasing number of market operators and analysts are questioning the policies of central banks.”

Crude oil climbed with the WTI trading around $112 a barrel and the Brent trading around $112 a barrel.