Asian markets mixed after China promises economic support

Sep 5, 2022, 9:45 PM | Updated: 10:07 pm
Currency traders watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquart...

Currency traders watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, Sept. 6, 2022. (AP Photo/Ahn Young-joon)

(AP Photo/Ahn Young-joon)

BEIJING (AP) — Asian stock markets were mixed Tuesday after China promised to speed up the rollout of policy changes to boost anemic economic growth.

Shanghai gained while Hong Kong declined. Tokyo and South Korea were unchanged at midday.

The Chinese Cabinet’s planning agency promised Monday to accelerate easier lending and other policies but announced no new spending. Economic growth sank to 2.5% over a year earlier in the second half, less than half the official annual target.

The announcement might “provide a short-term uplift” to sentiment, but investors “ultimately want to see a stronger recovery,” said Yeap Jun Rong of IG in a report.

The Shanghai Composite Index gained 1% to 3,232.24 while the Nikkei 225 in Tokyo was unchanged at 28,618.62. The Hang Seng in Hong Kong shed 0.2% to 19,188.25.

The Kospi in Seoul was unchanged at 2,403.90 and Sydney’s S&P-ASX 200 gained less than 0.1% to 6,855.50. New Zealand retreated while Southeast Asian markets gained.

U.S. markets were closed Monday for Labor Day.

European markets sank following Friday’s announcement by Russian gas giant Gazprom that a suspension of supplies through the Nord Stream 1 pipeline would be extended indefinitely. That adds to shortages in Germany and other economies.

The deputy director of China’s National Development and Reform Commission, Yang Yinkai, said the agency will “speed up the release of policy effectiveness” to “make up for losses caused by the epidemic in the second quarter,” according to news reports.

The government has trimmed interest rates, given entrepreneurs a break on rent and promised other aid to revive the economy after Shanghai and other industrial centers temporarily shut down to fight virus outbreaks. But it is avoiding major spending, possibly for fear of reigniting a rise in housing costs and debt that Chinese leaders worry is dangerously high.

Also Monday, Beijing freed up more foreign currency holdings of Chinese commercial banks for lending and trading by lowering the amount they must hold in reserve. The move rolls back an increase imposed last year to limit speculative trading and restrain the rise of the exchange rate of China’s yuan, which has since declined.

In energy markets, benchmark U.S. crude gained $1.71 to $88.58 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, lost 81 cents to $94.93 per barrel in London.

The dollar advanced to 140.48 yen from Monday’s 140.46 yen. The euro gained to 99.49 cents from 99.31 cents.

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Asian markets mixed after China promises economic support