Asian Shares Advance As China Boosts Liquidity Injection

Asian stocks rose on Monday amid bets that global central banks will start cutting interest rates next year to support an uneven economic recovery.

The upside, however, remained capped ahead of key quarterly earnings from NVIDIA Corp. and the release of the Federal Reserve’s minutes from its November meeting this week.

The dollar held below over two-month lows and gold was unchanged, while oil extended Friday’s rally on expectations of production cuts by Saudi Arabia and Russia in the coming days.

China’s Shanghai Composite Index rose 0.5 percent to 3,068.32 after the country’s central bank kept its loan prime rate near record lows, as widely expected, and added liquidity into markets via reverse repos.

Property stocks rebounded after China’s central bank and financial regulators pledged on Friday to ensure financing support for the beleaguered real estate sector.

Hong Kong’s Hang Seng Index jumped 1.9 percent to 17,778.07 after two days of steep losses.

Japanese shares reversed course to end lower, dragged down by automakers and chip-related stocks.

The Nikkei 225 Index briefly hit a 33-year high before ending down 0.6 percent at 33,388.03 due to profit taking after recent strong gains.

The broader Topix Index settled 0.8 percent lower at 2,372.60. Honda Motor and Toyota both fell around 4 percent amid the yen’s gains against the dollar.

Semiconductor test equipment supplier Advantest dropped 1.6 percent and Tokyo Electron declined 0.9 percent.

Panasonic Holdings jumped 5 percent to extend Friday’s rally after announcing a sale of a stake in its automotive systems business.

Casualty insurer Tokio Marine Holdings surged 5.6 percent on share buyback news.

Seoul stocks advanced, with the Kospi finishing 0.9 percent higher at 2,491.20. SK Hynix, which supplies memory chips, gained 1.2 percent.

Australian markets ended slightly higher as investors awaited the release of minutes of the Reserve Bank of Australia’s November meeting on Tuesday for clues on the central bank’s policy stance.

The benchmark S&P ASX 200 Index edged up 0.1 percent to 7,058.40, led by banks and energy stocks. The broader All Ordinaries Index closed 0.1 percent higher at 7,268.70.

Across the Tasman, New Zealand’s benchmark S&P NZX-50 Index closed up 0.3 percent at 11,207.46.

U.S. stocks finished slightly higher on Friday as bond yields fell further on dovish Fed expectations. In economic news, reports on housing starts and building permits painted a positive picture of the world’s largest economy.

The S&P 500 inched up 0.1 percent to clinch a third straight winning week and reach its best closing level in well over two months. The Dow and the tech-heavy Nasdaq Composite both saw marginal gains.

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