Asian stocks mostly gain as China boosts support for economy

BANGKOK (AP) — Stocks were mostly up in Asia on Tuesday after China’s central bank moved to provide more support to its slowing economy.

Oil prices fell, while U.S. futures rose, suggesting investor sentiment remains resilient despite worries about recession risks as prices rise sharply as economies continue to recover from the slump. impact of the pandemic.

Hong Kong’s Hang Seng index fell 2.2% to 21,058.78, weighed down by concerns over Chinese property developers and regulatory crackdowns on tech companies.

The People’s Bank of China conducted a 10 billion yuan ($1.6 billion) reverse repo operation to help add liquidity to the banking system, the official Xinhua news agency reported. In a reverse repo, the central bank buys securities from commercial banks with an agreement to resell them in the future.

Meanwhile, the central bank, through a banking industry association, has encouraged smaller lenders to cut the interest they offer on deposits to ease pressure on their finances, financial magazine Caixin reported. .

On Friday, the PBOC reduced the amount of reserves banks must keep, to free up more money for lending.

China announced on Monday that its economy grew at a quarterly rate of 1.3% in January-March, compared with 1.4% in the previous quarter. It grew at an annual rate of 4.8%, which was better than expected, but economists noted that the impact of shutdowns in dozens of cities, including Shanghai, to control coronavirus outbreaks was yet to come. .

The Shanghai Composite lost less than 0.1% to 3,194.03.

But most other regional markets grew. Tokyo’s Nikkei 225 rose 0.7% to 26,985.09 and Seoul’s Kospi added 1% to 2,718.89. In Sydney, the S&P/ASX 200 gained 0.6% to 7,565.20. India’s Sensex climbed 0.2% and Bangkok’s SET jumped 0.7%.

Japanese Finance Minister Shunichi Suzuki on Tuesday reiterated his concern over the weakening of the yen against the US dollar. The dollar rose sharply against the yen – a result of divergent monetary policies from the Bank of Japan, which is keeping interest rates low to support the faltering economy, and the Federal Reserve and other central banks raising rates to fight runaway inflation.

The dollar briefly rose above 128 yen and was trading at 127.86 yen on Tuesday evening. It hovered at 20-year highs for weeks.

A weaker yen makes Japanese exports more competitive overseas and improves profits for yen-denominated companies when converting to dollars, but it also raises the costs of importing oil and gas, foodstuffs, fuels, etc. manufacturing inputs and other necessities for the world’s third largest economy. .

Rising energy and food prices add to worries about how the Fed and other central banks will tame inflation without hampering the resumption of business activity after the slump caused by efforts to beat the epidemics. of coronavirus.

The conflict in Ukrainewhich added to those price pressures, showed no sign of easing as Russia launched a much-feared massive ground offensive on Monday, seeking to take control of eastern Ukraine.

“One of the biggest problems is that it’s increasingly rare to find a dissenting voice in the global process towards recession. Negativity about the economy is pervasive, and that alone can keep breeders from securities on the sidelines,” Stephen Innes of SPI Asset Management said in a comment.

On Wall Street, stocks closed slightly lower after a shaky trading day on Monday as worries about interest rates and inflation overshadowed some better-than-expected earnings reports.

The S&P 500 slipped less than 0.1% to 4,391.69. The Dow Jones Industrial Average lost 0.1% to 34,411.69 and the Nasdaq Composite Index fell 0.1% to 13,332.36.

Small stocks also faltered, with the Russell 2000 Index ending down 0.7% at 1,990.13.

The offset losses were better than expected earnings reports. Bank of America rose 3.4% after reporting earnings that were higher than analysts expected.

Energy producers continue to be the big winners from soaring oil and gas prices. The war in Ukraine is driving up demand for American gas as European customers try to divert Russian supplies. Natural gas jumped on Monday, with the U.S. price up 7.1% and near its highest level since 2008.

In other conversations:

The benchmark U.S. oil price fell 84 cents Tuesday to $107.37 a barrel in electronic trading on the New York Mercantile Exchange. It rose 1.2% to settle at $108.21 a barrel on Monday.

Brent crude, the international price standard, fell 65 cents to $112.51 a barrel.

The euro slipped to $1.0778 from $1.0781.