BackAsian stocks mixed after China rate hike
Asian stocks mixed after China rate hike
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Hong Kong: Asian markets were mixed on Wednesday, with news of China’s third interest rate hike in four months offsetting strength from another strong showing on Wall Street.
Shanghai slipped 0.79% soon after opening for the first time following the Lunar New Year break as dealers digested the central bank’s decision to raise rates Tuesday in a bid to get inflation under control.
Seoul shed 0.52%, Taipei fell 0.43% and Singapore was 0.35% off.
In Tokyo car giant Toyota surged more than 4% after a strong earnings report and news that a US probe cleared its electronics of causing acceleration problems in its vehicles.
However, the broader market gave up earlier gains to end the morning session flat.
In Hong Kong dealers ignored the China rate decision with the index opening 0.27% higher while Sydney was 0.40% up.
The People’s Bank of China said Tuesday it would raise the one-year deposit and lending rates by 25 basis points each, taking the rates to 3.0% and 6.06% respectively.
Policymakers announced a hike for the first time in nearly three years in October as they try to rein in inflation and property prices. It followed up with another rise in late December.
However, market-watchers did not expect the hike to have a huge impact on markets.
“The rate hike hit market sentiment, but is unlikely to spark heavy selling on stocks as such tightening moves have been expected for some time," Zhang Gang, an analyst from Central China Securities, told Dow Jones Newswires.
Regional investors were given a strong lead from Wall Street, where the Dow finished 0.59% up at a fresh two-year high.
Oil prices rose back above $100 a barrel in Asian trade on renewed concerns over the crisis in Egypt, which dealers fear could lead to supply problems.
Brent North Sea crude for March delivery was up 29 cents to $100.21.
New York’s main contract, light sweet crude for delivery in March, rose 55 cents to $87.49 per barrel after figures showed US stockpiles were falling.
Crude prices had eased over the past few days as the protests in Cairo seemed to have simmered down but Tuesday saw the biggest show of defiance against President Hosni Mubarak since the revolt began.
On currency markets the dollar eased to ¥82.27 in early Tokyo trade from ¥82.31 from New York late Tuesday. The euro rose to $1.3627, compared with $1.3621, but eased to ¥112.09 from 112.14.
Gold closed at $1,364.00-$1,365.00 an ounce in Hong Kong, up from Tuesday’s close of $1,355.70-$1,356.70.
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