Asian shares mostly higher as China cuts loan rate

BANGKOK — Asian shares were mostly higher on Friday after a lackluster session on Wall Street, as investors shifted their focus to China-U.S. trade talks after a busy week of central bank news.

Japan’s Nikkei 225 index gained 0.4% to 22,135.98 and the Shanghai Composite index rose 0.2% to 3,004.48. The Kospi in South Korea climbed 0.4% to 2,089.00 and Australia’s S&P ASX 200 picked up 0.6% to 6,760.50. Hong Kong’s Hang Seng lost less than 0.1% to 26,465.78.

Shares rose in Taiwan and Singapore but fell in Jakarta and Bangkok.

As anticipated, China’s central bank reduced its 1-year loan prime rate to 4.2% from 4.25%, slightly easing monetary conditions.
U.S. and Chinese officials were meeting in Washington to prepare trade negotiations next month in the trade war that has cast a shadow on growth.

But expectations have remained modest, with both sides indicating there is little too maneuver on the key sticking points over Beijing’s industrial and technology policies.

“To some extent the latest updates on U.S.-China officials having met face-to-face in Washington tilts the sentiment back to the positive, one to aid Asia markets, but it once again highlights the fragility of the market sentiment on this biggest risk that persists,” Jingyi Pan of IG said in a commentary.

Major U.S. stock indexes ended mixed Thursday after an early rally fizzled toward the end of the day.

The S&P 500 index rose 0.06 points, or less than 0.1%, to 3,006.79. The Dow Jones Industrial Average gave up an early gain, sliding 0.2% to 27,094.79. The Russell 2000 index of smaller company stocks also relinquished an early gain, ceding 0.4% to 1,561.47.
The Nasdaq squeaked out a gain of 5.49 points, or 0.1%, to 8,182.88.

On Wednesday, the Fed reduced its benchmark interest rate for the second time this year, seeking to prevent the economy from stalling in the face of slowing economic growth overseas and uncertainty over the U.S.-China trade war.

Bond prices were little changed. The yield on the 10-year Treasury held at 1.77%.

Traders were encouraged Thursday by new economic snapshots, including data indicating U.S. home sales rose sharply last month and an index of manufacturing activity that came in ahead of analysts’ forecasts. In addition, applications for U.S. unemployment aid edged higher last week, but still totaled less than what economists projected.

Recent data suggests the U.S. job market is solid, wages are rising, consumers are still spending and even such sluggish sectors as manufacturing and construction have shown signs of rebounding. Still, investors have been trying to gauge how the economy will fare amid a slowdown in economies overseas and uncertainty over the trade war between the U.S. and China.

“A lack of escalation or potential de-escalation would be something that would be viewed positively by the markets,” said Bill Northey, senior investment director at U.S. Bank Wealth Management.

ENERGY: Benchmark U.S. crude picked up 54 cents to settle at $58.73 a barrel in electronic trading on the New York Mercantile Exchange. It’s up 6.3% this week following the attack on a Saudi Aramco facility last weekend that temporarily cut the country’s exports by half. Brent crude, the international standard, rose 32 cents to close at $64.72.

The dollar fell to 107.91 Japanese yen from 107.92 yen on Thursday. The euro strengthened to $1.1056 from $1.1042. /gsg