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Asian shares end see-saw session mixed after China rate cut

/ 12:47 AM August 27, 2015
A Filipino trader walks in front of the electronic board at the Philippine Stock Exchange at the financial district of Makati on Wednesday, Aug. 26, 2015. Asian shares closed mixed after a choppy session on Wednesday, with investors selling off Chinese stocks despite an interest rate cut, while other markets found their footing.  AP PHOTO/AARON FAVILA

A Filipino trader walks in front of the electronic board at the Philippine Stock Exchange at the financial district of Makati on Wednesday, Aug. 26, 2015. Asian shares closed mixed after a choppy session on Wednesday, with investors selling off Chinese stocks despite an interest rate cut, while other markets found their footing. AP PHOTO/AARON FAVILA

HONG KONG–Asian shares closed mixed after a choppy session on Wednesday, with investors selling off Chinese stocks despite an interest rate cut, while other markets found their footing.

The dollar edged up in Tokyo, extending a rebound from this week’s heavy losses after China’s move to cut its key rates and free up cash for banks to lend spurred optimism about the world’s second-largest economy.

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Tokyo surged 3.20 percent, or 570.13 points, to close at 18,376.83— rebounding from a six-month low in the previous session after their worst two-day plunge since 2011.

Sydney closed up 0.69 percent, or 35.52 points, at 5,172.77 and Seoul rose 2.57 percent, or 47.46 points, to 1,894.09.

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But Shanghai fell 1.27 percent, or 37.68 points, to 2,927.29, after a day that saw it veer wildly between losses and gains of around 4 percent, while Hong Kong lost 1.52 percent, or 324.57 points, to 21,080.39.

“China did what the market was looking for… by easing policy, but it appears that the markets want more. Thanks, but we are not quite happy yet,” National Australia Bank senior currency strategist Emma Lawson said.

China’s central bank on Tuesday warned that the “economic growth rate remains under pressure,” adding the cuts were meant in part to “support the real economy to continue to develop healthily.”

The People’s Bank of China (PBoC) cut its benchmark lending and deposit interest rates by 0.25 percentage points each and its reserve requirement ratio by 0.50 percentage points—the second such combination move in two months.

‘Circuit-breaker needed’

Fears of stalling growth in China, the world’s second-largest economy, sparked one of the worst routs since the global financial crisis, with commodities, emerging market currencies and shares all diving.

Traders said the rate cuts had restored some confidence that Beijing would act to shore up both its economy and its stocks, but more needed to be done to calm frazzled investors.

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“A circuit-breaker is needed to dispel excessive pessimism and restore confidence,” Frederic Neumann, co-head of Asian economics research at HSBC in Hong Kong, told Bloomberg News.

“Further support measures in the coming weeks and months will be needed.”

In currency trade, the dollar remained under pressure at 119.52 yen, up from 118.84 yen in New York trade Tuesday, but dramatically weaker than the 122.06 yen seen in US trade on Friday.

The euro stood at $1.1481 and 137.23 yen in Tokyo, compared with $1.1518 and 136.87 yen in New York overnight.

Oil prices gained ahead of the latest US energy report, after plummeting to their lowest levels since early 2009 this week as investors fretted about falling demand in the face of a world supply glut.

US benchmark West Texas Intermediate for October delivery rose 14 cents to $39.45 and Brent crude for October added two cents to $43.50.

Gold traded at $1,131.80 compared to $1,149.80 late Tuesday.

In individual shares, BHP Billiton rose 2.57 percent to Aus$23.94 after the global mining giant announced a 86.2 percent slump in annual net profit on Tuesday.

In other markets:

— Taipei rose 0.52 percent, or 39.95 points, to 7,715.59.

Taiwan Semiconductor Manufacturing Co. was down 0.81 percent to Tw$122.5 while Fubon Financial Holding added 2.89 percent to Tw$53.4.

— Wellington lost 0.63 percent, or 35.51 points, to 5,577.78.

Fletcher Building fell 1.53 percent to NZ$7.08 and Air New Zealand dipped 3.02 percent to NZ$2.57 despite announcing a record annual net profit.

— Manila rose 0.55 percent, or 37.58 points, to 6,867.92.

Top-traded GT Capital was up 0.85 percent to 1,190 pesos, LT Group was up 2.10 percent to 12.66 pesos, while Ayala Land was up 2.69 percent to 34.40 pesos.

— Jakarta ended up 0.22 percent, or 9.23 points, at 4,237.73.

Cement manufacturer Indocement Tunggal Prakarsa gained 5.36 percent to 17,700 rupiah, while palm oil company Sawit Sumbermas Sarana slipped 3.95 percent to 1,580 rupiah.

— Kuala Lumpur gained 1.05 percent, or 16.43 points, to close at 1,580.37.

Sime Darby added 4.63 percent to 7.45 ringgit, Maybank went up 2.29 percent to 8.50 ringgit while RHB Capital fell 2.38 percent to 6.16 ringgit.

— Bangkok fell 0.29 percent, or 3.80 points, to 1,320.08.

Siam Cement dropped 2.89 percent to 470 baht while Kasikorn Bank added 2.99 percent to 172.50 baht.

— Singapore closed down 0.46 percent, or 13.29 points, to 2,873.00.

Singapore Telecom eased 1.28 percent to Sg$3.85 while Oversea-Chinese Banking Corporation was down 0.78 percent to Sg$8.89.

— Mumbai fell 1.22 percent, or 317.72, to 25,714.66.

Bharat Heavy Electricals gained 3.45 percent to 240.20 rupees but Housing Development Finance Corporation slumped 3.77 percent to 1102.45 rupees.

First published on Aug. 26, 2015 @ 16:22

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TAGS: Asian stocks, Finance, gold price, oil prices, Shanghai Composite Index, Shanghai stock index
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