Asian stocks rise on Chinese central bank support
BEIJING (AP) — Asian stocks rose Tuesday after China's central bank injected extra credit into its financial system, helping to offset concern about slower Chinese growth.
China's benchmark Shanghai Composite Index rose just over 1 percent to 2,011.33 points and Tokyo's Nikkei 225 jumped 1.4 percent to 15,866.54. Hong Kong's Hang Seng gained 0.6 percent to 23,055.50 while Seoul, Taiwan and Sydney also rose.
Markets were uneasy Monday after China's fourth-quarter growth declined slightly from the previous quarter but confidence rebounded after the Chinese central bank promised extra liquidity in the financial system. The move ahead of the Lunar New Year holiday, when credit often is tight, is likely to boost markets by lowering trading costs.
"This will reduce the credit crunch fears and assure funding continues to flow into the Chinese economy over this period," said strategist Evan Lucas at IG Markets in a report.
Seoul's Kospi rose 0.5 percent to 1,963.40. Taiwan's Taiex added 0.1 percent to 8,630.04. Sydney's S&P/ASX 200 rose 0.6 percent to 5,324.80. Singapore, Jakarta and New Zealand also rose.
Data on Monday showed China's economy expanded by 7.7 percent in the final quarter of the year, down slightly from the previous quarter's 7.8 percent. But quarter-on-quarter, growth in the three months ending in December slumped to 1.8 percent from the previous period's 2.2 percent.
China's growth is far stronger than the United States, Japan or Europe but factory output, retail sales and investment cooled toward the end of 2013. Slower growth will complicate the ruling Communist Party's efforts to encourage more self-sustaining growth based on domestic consumption instead of trade and investment.
On Monday, Britain's FTSE 100 gained 0.1 percent while France's CAC 40 shed 0.1 percent. Germany's DAX dropped 0.3 percent after Deutsche Bank said it book an unexpected fourth-quarter loss.
Analysts said Wall Street is likely to focus on U.S. corporate earnings when trading resumes Tuesday following a one-day break for Martin Luther King Day. Markets will also be cautious ahead of the Federal Reserve's next meeting on Jan 29.
In energy markets, benchmark crude for February delivery was down 46 cents at $94.13 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 49 cents on Monday to settle at $94.59.
The euro was steady at $1.355 while the dollar gained 0.2 percent to 104.61 yen.