Asian shares climbed Monday, as investors embraced a move by China that could help lower borrowing rates for companies, and signals that trade talks between Washington and Beijing could be improving.
On Saturday, the People’s Bank of China unveiled a key interest rate reform aimed at lowering real interest rates for companies as the country faces a slowing economy. Last week’s data showed China’s economy slowed more sharply than expected in the third quarter.
While Trump on Sunday suggested no quick end to the trade war with China, some investors were encouraged after Trump said he spoke with Apple Chief Executive Tim Cook, who warned the president that tariffs could hurt his tech company by giving rivals like South Korea’s Samsung Electronics 005930, -0.68% an edge. Trump said Cook made a “very compelling argument, so I’m thinking about it.”
Japan’s benchmark Nikkei 225 NIK, +0.71% closed up 0.7%. Hong Kong’s Hang Seng HSI, +2.17% gained 2.3% after a massive but peaceful pro-democracy march, while the Shanghai Composite SHCOMP, +2.10% added 3%. South Korea’s Kospi 180721, +0.66% was 0.7% higher, and benchmark indexes in Taiwan Y9999, +0.65% , Singapore STI, +0.41% and Indonesia JAKIDX, +0.14% all rose. Australia’s S&P/ASX 200 XJO, +0.97% closed up 0.9%.
Among individual stocks, convenience-store chain FamilyMart 8028, +8.73% surged in Tokyo trading. SoftBank 9984, +1.69% and Mitsubishi UFJ 8306, +1.30% also rose. In Hong Kong, Sunny Optical 2382, +5.56% gained, along with property developer Country Garden 2007, +5.82% and casino operator Galaxy Entertainment 27, +4.70% . LG Electronics 066570, +0.67% advanced in South Korea, while Taiwan Semiconductor 2330, +0.80% rose in Taiwan. In Australia, Beach Energy BPT, +10.80% surged, while Commonwealth Bank CBA, +1.56% and ANZ Banking ANZ, +1.25% rose as well.
On Friday, the S&P 500 SPX, +1.44% rose 41.08 points, or 1.4%, to 2,888.68. The Dow DJIA, +1.20% , which had an 800-point drop earlier in the week, added 306.62 points, or 1.2%, to 25,886.01. The Nasdaq COMP, +1.67% climbed 129.38 points, or 1.7%, to 7,895.99. Each index still finished with a third-straight weekly decline.
Wall Street stocks and other investments had heaved and dropped all week, hitting a crescendo on Wednesday when a fairly reliable warning signal of recession flipped on in the U.S. Treasury market.
Investors are hoping that the Federal Reserve will continue to cut interest rates to shore up economic growth. The central bank lowered interest rates by a quarter-point at its last meeting. It was the first time it lowered rates in a decade.
“With global economic engines still clattering and in desperate need of some high-grade Central Bank stimulus, investors are still pinning their hopes on central bank policy,” said Stephen Innes, managing partner at Valour Markets in Singapore.
Investors are also worried about Trump’s shocking announcement on Aug. 1 that he planned to extend tariffs across virtually all Chinese imports, many of them consumer products that were exempt from early rounds of tariffs. The tariffs have been delayed, but ultimately will raise costs for U.S. companies bringing goods in from China.
Benchmark crude oil CLU19, +1.06% rose 83 cents to $55.70 a barrel. It rose 40 cents to settle at $54.87 a barrel Friday. Brent crude oil BRNV19, +1.01% , the international standard, rose 96 cents to $59.59 a barrel.
The dollar USDJPY, +0.18% rose to 106.37 Japanese yen from 106.24 yen Friday.
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