Asian stocks higher on China stimulus reports
KUALA LUMPUR, Malaysia (AP) — Asian stock markets were mostly higher Wednesday, buoyed by reports that China is providing liquidity to major banks and hopes that the Federal Reserve will not speed up plans to raise interest rates.
KEEPING SCORE: Tokyo's Nikkei 225 rose 0.1 percent to 15,929.85 and Hong Kong's Hang Seng surged 1.2 percent to 24,415.89. However, China's Shanghai Composite dipped 0.1 percent to 2,294 while Australia's S&P/ASX 200 lost 0.4 percent to 5,426.10. Markets in South Korea, Taiwan, Singapore and Indonesia were higher.
CHINA BANKS: Sentiment was boosted by news reports that China's central bank will inject a total of 500 billion yuan ($81 billion) into the five biggest state banks over three months. Additional financial system liquidity would build on targeted measures to shore up growth, amid a bout of weak economic data. There was no official confirmation of the reports.
FED WATCH: Some investors are hoping that the statement from the Fed meeting that ends Wednesday will maintain the phrase "considerable time" to remain in its plan to raise interest rates. Some analysts said the recent rally in the U.S. dollar, which may dampen some areas of the U.S. economy, has become a reason for the Fed to turn cautious. The Fed has held the rate close to zero for more than five years, and stocks have surged against that backdrop.
THE QUOTE: Chinese support for banks if confirmed "is likely to snap Asian equities out of their Fed-induced slumber," said Evan Lucas, market strategist with IG in Australia. "However I again reiterate that the Fed is still the main driving force in the market currently."
ENERGY: Benchmark U.S. crude was down 7 cents to $94.81 a barrel in electronic trading on the New York Mercantile Exchange. It rose $1.96 to close at $94.88 a barrel on Tuesday.