Asia shares mostly up after US jobs report, China rate cut
A man is reflected on an electronic stock board of a securities firm in Tokyo on Monday, May 11, 2015. Asian stocks rose on Monday after China’s central bank cut interest rates in the latest move by policymakers to reinvigorate the country’s stumbling economy. AP PHOTO/KOJI SASAHARA
HONG KONG–Asian markets mostly rose Monday following a healthy US jobs report last week, while investor sentiment was also boosted by China’s decision to cut interest rates for the third time in six months.
The euro retreated against the dollar and yen before a crucial eurozone meeting later in the day which Greece hopes will pave the way for a loan deal.
Shanghai jumped 3.04 percent, or 127.66 points, to 4,333.58 and Hong Kong added 0.51 percent, or 140.86 points, to close at 27,718.20.
Tokyo rallied despite heavy losses in Sharp and Toshiba owing to fears about their balance sheets. The Nikkei added 1.25 percent, or 241.72 points, to close at 19,620.91.
Seoul ended 0.57 percent higher, adding 11.86 points to 2,097.38 but Sydney finished 0.17 percent, or 9.4 points, lower at 5,625.2.
China’s central bank on Sunday cut rates by 25 basis points–after two similar moves since November–as it tries to support the world’s No. 2 economy, which grew last year at its slowest pace since 1990.
The move is the latest stimulus by the People’s Bank of China, which has also twice this year reduced the amount of cash banks must keep in reserve.
It followed another disappointing set of economic indicators, with inflation coming in below forecasts for April and exports unexpectedly falling.
“The consensus was that there’ll be at least one or two more stages of monetary easing in China, so there’s no big surprise,” Shoji Hirakawa, chief equity strategist at Okasan Securities in Tokyo, told Bloomberg News.
Dealers were already upbeat after a US Labor Department report Friday showed the economy added 223,000 jobs in April and unemployment fell to a seven-year low of 5.4 percent.
While the growth was not as much as expected, analysts said it was strong enough to suggest the economy was picking up–but not enough that the Federal Reserve would feel comfortable raising interest rates soon.
Greece in focus
On Wall Street Friday the Dow rose 1.49 percent, the S&P 500 jumped 1.35 percent and the Nasdaq was up 1.17 percent.
In Tokyo Monday the dollar edged up to 119.87 yen from 119.77 yen in New York.
The euro fetched $1.1164 and 133.81 yen in Tokyo against $1.1208 and 134.25 yen.
The single currency was under pressure as investors await the meeting in Brussels, with Greece’s Prime Minister Alexis Tsipras saying he was hoping for a positive statement on the country’s progress in negotiating a debt reform deal.
Athens needs at least some of its 7.2 billion euros in remaining bailout cash so it can service its debts and avert a default that would likely see it leave the eurozone.
“The to-ing and fro-ing on Greece” is weighing on the euro, said Joseph Capurso, a strategist at Commonwealth Bank of Australia in Sydney.
He warned of further uncertainty, saying the talks will probably be “kicking the can down the road for a while longer.”
In Tokyo, Sharp lost more than a quarter of its value on reports it plans a drastic capital reduction to help wipe out losses. The firm plunged as much as 31 percent in the morning before ending 26.35 percent lower.
And Toshiba slumped 16.55 percent after withdrawing its earnings forecast and saying it will not pay a dividend, citing accounting problems on a number of infrastructure projects.
Oil prices were lower. US benchmark West Texas Intermediate for June delivery dropped 24 cents to $59.15, while Brent crude for June lost 38 cents to $65.01 in afternoon trade.
Gold fetched $1,185.20 from $1,187.01 late Friday.
In other markets:
— Taipei fell 0.29 percent, or 28.28 points, to 9,663.72.
Fubon Financial Holding closed 0.90 percent lower at Tw$65.8 while leading chip design house MediaTek shed 1.73 percent to Tw$370.0.
— Wellington added 0.22 percent, or 12.60 points, to 5,747.95.
Air New Zealand was up 1.08 percent at NZ$2.81 and Chorus rose 0.50 percent to NZ$3.005.
— Manila ended 0.19 percent, or 14.69 points, higher at 7,777.90.
Alliance Global was up 0.61 percent to 24.70 pesos and BDO Unibank was up 0.18 percent to 111.40 pesos. Universal Robina was down 0.89 percent at 200.20 pesos.
— Mumbai rose 1.48 percent, or 401.91 points, to end at 27,507.30 points.
State Bank of India climbed 5.44 percent to 276.05 rupees, while Hindustan Unilever fell 3.34 percent to 864.70 rupees.
— Bangkok slipped 0.61 percent, or 9.21 points, to 1,501.30.
Coal producer Banpu lost 0.86 percent, or 0.25 baht, to 28.75 while Bangkok Bank rose 1.91 percent, or 3.50 baht, to 187.
— Kuala Lumpur fell 0.12 percent, or 2.16 points, to 1,805.49.
Axiata Group was among top gainers, rising 1.81 percent to close at 6.74 ringgit, with IHH Healthcare gaining 1.35 percent to end on 6.00 ringgit. IOI Corp lost 1.67 percent to close the day at 4.13 ringgit.
— Jakarta lost 0.19 percent, or 9.73 points, at 5,172.48.
Coal firm Adaro Energy rose 5.23 percent to 905 rupiah, while cement manufacturer Indocement Tunggal Prakarsa fell 1.79 percent to 22,000 rupiah.
— Singapore rose 0.57 percent, or 19.81 points, to close at 3,471.82.
Singapore Telecom jumped 1.16 percent to Sg$4.37 and DBS Bank gained 0.19 percent to Sg$21.09.
