MANILA, Philippines — Most Asian markets rose yesterday following another record for the S&P 500 on Wall Street that came on the back of optimism over the US economic outlook and a positive run of earnings.
That has helped offset fading expectations the Federal Reserve will cut interest rates several times this year starting in March.
Adding to the positive sentiment was news of China’s fresh measures to boost bank lending. The People’s Bank of China (PBoC) said it would lower next month the amount of cash banks must keep in reserve as it looks to ramp up lending to help kick-start the stuttering economy.
The 0.5 percentage point cut in the reserve requirement ratio would pump an extra $140 billion into financial markets, the PBoC said.
News of the reduction came a day after Bloomberg reported that Premier Li Qiang had called for more “forceful” measures to support China’s battered stocks, giving a shot in the arm to investor confidence.
Authorities were said to be looking at a raft of initiatives, and policymakers were seeking to mobilize nearly $280 billion, mainly from the offshore accounts of state-owned enterprises.
The bellwether Philippine Stock Exchange index (PSEi) advanced for the third straight day, closing 58.08 points or 0.88 percent higher at 6,679.96 on P4.47 billion worth of trades.
Investors are keeping a close eye on the US earnings season, which analysts said had so far been largely positive, spurring hope that the world’s top economy will continue to grow healthily, even with interest rates still sitting at two-decade highs.
Wall Street remained optimistic despite bets on a March rate cut waning following warnings from Fed officials that they were determined to do what was needed to tame inflation, suggesting a more dovish turn was not yet in the offing.
“The excitement is kind of gone at this point and everybody’s sobering up a little bit after the pivot party,” said Emily Roland, at John Hancock Investment Management, referring to an end-of-year equity surge sparked by expectations of an early Fed reduction.
The Hong Kong bourse led Asia’s gainers for a second day following reports Alibaba’s co-founders had bought huge stakes in the firm.
The Hang Seng’s rise was fuelled by a 7.3 percent surge in Alibaba on news that Jack Ma and Joseph Tsai had bought about $200 million worth of shares between them, which Bloomberg said was seen as a positive signal to investors in the e-commerce titan.