Hong Kong rebound leads Asian stocks higher

AP News
Posted: Apr 21, 2015 12:31 AM
Hong Kong rebound leads Asian stocks higher

HONG KONG (AP) — Hong Kong led Asian stocks higher Tuesday as investors shook off initial pessimism over new measures by China's market regulator.

KEEPING SCORE: Hong Kong's Hang Seng jumped 2.1 percent to 27,669.75 and the Shanghai Composite Index in mainland China added 0.9 percent to 4,253.55. Japan's Nikkei 225 gained 1 percent to 19,825.10 while South Korea's Kospi was practically unchanged at 2,145.98. Australia's S&P/ASX 200 climbed 0.6 percent to 5,866.30.

HONG KONG BOUNCE: Hong Kong stocks have yo-yoed as investors continue to evaluate regulatory changes for stock investors as well as monetary loosening measures, both announced by Chinese authorities over the weekend. Mainland investors seeking attractively priced stocks have been piling into the Hong Kong market, which has underperformed compared with Shanghai over the past year. On Sunday the central bank slashed the required reserve ratio for banks by 1 percentage point to stimulate lending into a slowing economy. Separately, the country's stock regulator said Saturday that new measures to tighten up on some margin financing and encourage short selling were intended to prevent the market's development and not meant as a crackdown.

MARKET VIEW: Chinese authorities are using the new measures, especially the reserve ratio cut, to "encourage a longer, steadier rally to take place and people are just reacting to that," said Andrew Sullivan of Haitong Securities. "It does everything that China wants: it takes pressure off the housing bubble, makes people feel better off and it takes money out of the shadow banking system and puts it into stock market."

WALL STREET: Major U.S. stock benchmarks bounced higher Monday thanks to some good first-quarter earnings reports. This week is one of the busiest for first-quarter earnings with 147 companies, close to one-third of those in the Standard & Poor's 500 scheduled to report their results. The Dow Jones industrial average gained 1.2 percent to 18,034.93 while the S&P 500 index climbed 0.9 percent to 2,100.40. The Nasdaq composite climbed 1.3 percent, to 4,994.60.

ENERGY: Benchmark U.S. crude oil rose lost 14 cents to $57.74 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 56 cents to settle at $57.88 on Monday. Brent crude, a benchmark for international oils used by many U.S. refineries, slipped 3 cents to $63.42 a barrel in London.

CURRENCIES: The dollar strengthened to 119.44 from 119.26 in late trading Monday. The euro slipped to $1.0727 from $1.0741.