Asian stocks enjoyed a modest lift on Friday with investor mood boosted after China announced more support measures for its ailing housing sector.
Beijing also acted to stabilise the yuan, though traders remained cautious ahead of US jobs data that could make or break the case for further rate hikes.
This all unfolded as super typhoon Saola, packing winds of more than 200kph (125mph), bears down on Hong Kong and the southeast China coast, closing the territory’s stock exchange.
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Meanwhile, mainland China shares rose led by property stocks, after the central bank and the country’s financial regulator issued notices to ease some borrowing rules to aid homebuyers, including lowering the existing mortgage rate for first-home buyers and the down payment ratio in some cities.
Following this, five of China’s biggest banks cut interest rates on a range of deposits in a coordinated effort to ease pressure on their shrinking margins as lenders move to lower mortgage rates.
The Shanghai Composite Index rose 0.43%, or 13.37 points, to 3,133.25, while the Shenzhen Composite Index on China’s second exchange added 0.31%, or 6.10 points, to 1,953.58.
The Hong Kong market, closed due to typhoon Saola, added 2.4% for week.
Further north, Japan’s Topix index hit a 33-year high in a broad rally as investors scooped up undervalued stocks, with Sony Group and banking shares leading the gains.
The broader Topix jumped 0.88% by the midday break, its highest level since July 1990. It closed 0.76% ahead, or 17.75 points, at 2,349.75. The Nikkei share average edged up 0.28%, or 91.28 points, to close at 32,710.62.
Strong demand from foreign investors for heavyweight stocks had lifted the benchmark Nikkei to a 33-year high in June, but they have since taken a pause from buying recently, with data showing two consecutive weeks of foreign outflows from Japanese equities.
Beijing Acts to Slow Yuan Fall
Elsewhere, in the early session, investors traded cautiously with Seoul, Mumbai, Taipei, Manila, Bangkok and Jakarta up but Sydney and Wellington in the red. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.18%.
US consumer spending increased by the most in six months in July, but slowing monthly inflation rates cemented expectations that the Federal Reserve would keep interest rates unchanged next month. US August payrolls readings later in the day could offer more clues.
Meanwhile, the country’s central bank said on Friday it will cut the amount of foreign exchange that financial institutions must hold as reserves for first time this year, a move seen aimed at slowing the pace of recent yuan depreciation.
China’s onshore yuan surged to a high of 7.2360 per dollar in the early Asian session, its strongest since August 11, before last fetching 7.2605 around 0600 GMT on Friday.
The yield on benchmark 10-year notes rose by 1.92 basis points to 4.1102%, from 4.091%.
US crude rose 0.2% to $83.80 per barrel and Brent was at $87.04, up 0.24%. Spot gold was down 0.01% to $1,939.69 an ounce.
Key figures
Tokyo – Nikkei 225 > UP 0.28% at 32,710.62 (close)
Hong Kong – Hang Seng Index <> CLOSED
Shanghai – Composite > UP 0.43% at 3,133.25 (close)
London – FTSE 100 > UP 0.47% at 7,474.32 (0934 BST)
New York – Dow < DOWN 0.48% at 34,721.91 (Thursday close)
- Reuters with additional editing by Sean O’Meara
Read more:
China’s Big Banks Cut Rates, Prepare to Lower Mortgages
Hong Kong, Shenzhen Bracing as Super Typhoon Saola Nears
Hang Seng Hit by China Output Drop, Nikkei Lifted by Buy-Backs
