Asian stocks mixed after China’s rate hike

Asian stocks mixed after China’s rate hike

Tokyo: Asian stock markets were mixed Monday after China’s central bank raised interest rates over the weekend in a bid to rein in soaring inflation.

Investors shrugged off China’s rate hike -- the second in just over two-month -- as the move was widely expected. Traders speculated that China would further tighten its monetary policy to cool inflation.

Japan’s benchmark Nikkei 225 stock average rose 61.07 points, or 0.6%, to 10,340.26 in the morning session. The Shanghai Composite index gained 15.44 points, or 0.5%, to 2,850.60.

Shares in Singapore were marginally higher, but those in Malaysia and Taiwan fell, with South Korea’s Kospi down 0.1% to 2,026.75.

Stock markets in Australia, New Zealand and Hong Kong were closed Monday for the Christmas holiday.

In thin Asian trading, investors reacted coolly to China’s rate hike Saturday, which will lift the benchmark lending rate by 25 basis points to 5.81%. The Chinese central bank said the one-year deposit rate will also climb by 25 basis points to 2.75%.

The rate increases follow similar moves 19 October as Beijing battles to tame rising inflation, which could threaten political stability. Inflation is an especially sensitive issue in China, where poor families spend up to half their incomes on food.

China’s inflation jumped to 5.1% in November -- a 28-month high -- despite a crackdown on speculation and repeated moves to curb a flood of money circulating in the economy from massive stimulus spending and bank lending.

In currencies, the dollar rose to ¥82.92 in Tokyo on Monday from ¥82.89 in New York late Friday. The euro stood at $1.3112 from $1.3113.

The US stock markets were closed Friday for Christmas.

Benchmark oil for February delivery fell 12 cents to $91.39 in electronic trading on the New York Mercantile Exchange.