South Korean stocks jump more than 7% as China keeps lending prime rate unchanged
Asia-Pacific stocks rose on Friday as China kept prime lending rates unchanged.
South Korean stocks, which suffered heavy losses on Thursday, surged to the close as the Kospi rose 7.44% to 1,566.15 while the Kosdaq index jumped 9.2% to 467.75.
that of Hong Kong Hang Seng Index also jumped 3.97%, from its last hour of trading.
Mainland Chinese stocks also edged up on that day, with the Shanghai Composite 0.47% more while the Shenzhen composite added 0.166%.
In Australia, the S & P / ASX 200 rose 0.7% to close at 4,816.60, with the heavily weighted financial sub-index rising 3.56%.
In Southeast Asia, the Straits Times Index in Singapore gained 1.3% in afternoon trading.
In total, the MSCI Asia ex-Japan index gained 4.32%.
Markets in Japan were closed on Friday for a public holiday.
China’s Prime Lending Rates (LPR) were unchanged from their February levels on Friday, with the 1-year and 5-year LPRs held steady at 4.05% and 4.75%, respectively.
Following the publication of prices, the Chinese onshore yuan strengthened against the greenback at 7.0964 per dollar. The offshore yuan also posted gains at 7.1292 per dollar.
Meanwhile, developments in the ongoing global coronavirus outbreak have continued to be watched, with markets having seen wild moves in recent days as investors continue to weigh the potential economic impact of the disease.
“Uncertainty and volatility are becoming the norm in financial markets amid the coronavirus crisis,” Kim Mundy, currency strategist at the Commonwealth Bank of Australia, wrote in a note. “Central banks continue to do their utmost to limit the disruption due to the coronavirus pandemic. “
Central banks around the world, ranging from Australia Reserve Bank of Australia in the USA Federal Reserve, have cut interest rates and announced plans to buy bonds in recent days as authorities around the world rush to tackle the economic impact of the coronavirus outbreak.
“I think what worries a lot of people and I think … what confuses a lot of people is that usually when people exit the stock market they then enter bonds,” David Kuo, co- founder of The Smart Investor, told CNBC’s “Capital Connection” Friday. Buying bonds then depresses yields, he said.
“But that’s not happening this time because people aren’t buying bonds either, so it’s really up to central banks now to… create that money in order to buy the bonds, in order to try to depress it. … That bond yield, ”Kuo said.
Bond yields are rising now as governments say they will “do whatever it takes,” he said. “They are creating the money now to solve the initial problem, but I think most investors know it will have to be paid for at a later stage.”
Australian banks announced on Friday that loan repayments for small businesses affected by the coronavirus outbreak would be six months deferred.
In a statement announcing the small business aid plan, Australian Banking Association CEO Anna Bligh said the move would apply to more than A $ 100 billion ($ 58.8 billion) in existing loans to small businesses and could put up to A $ 8 billion ($ 4.7 billion) “in the pockets of small businesses”.
Oil prices rose in the afternoon of Asian trading hours, with an international benchmark Brent Crude Futures adding 4% to $ 29.61 per barrel. U.S. crude futures contracts also jumped 6.3% to $ 26.81 a barrel.
The evolution of oil prices can be explained by a strong rebound Thursday, the American crude having had its best day ever.
The US dollar index, which tracks the greenback against a basket of its peers, was last at 101.741 after hitting a previous high of 102.922.