Asia shares up after US jobs report, China rate cut

GMT 06:36 2015 Monday ,11 May

Arab Today, arab today Asia shares up after US jobs report, China rate cut

Asian markets
Hong Kong - AFP

Asian markets advanced on Monday following a healthy US jobs report last week, while investor sentiment was also boosted by China's decision to cut interest rates at the weekend for the third time in six months.

The euro retreated against the dollar and euro ahead of a crucial eurozone meeting later in the day that Greece hopes will pave the way for a loan deal.

Shanghai added 0.60 percent, Hong Kong rose 0.74 percent, while Sydney added 0.10 percent and Seoul was 1.02 percent higher.

Tokyo rallied 1.35 percent despite heavy losses in Sharp and Toshiba.

China's central bank on Sunday cut rates by 25 basis points -- after two similar moves since November -- as it looks to support the world's number two economy, which grew last year at its slowest pace since 1990.

The move is the latest stimulus by the People's Bank of China, which has also twice this year reduced the amount of cash lenders must keep in reserve.
It also came after another disappointing set of economic indicators, with inflation coming in below forecasts for April and exports unexpectedly falling.

"The consensus was that there'll be at least one or two more stages of monetary easing in China, so there's no big surprise," Shoji Hirakawa, chief equity strategist at Okasan Securities in Tokyo, told Bloomberg News.

"The timing was earlier than expected, so they've probably moved assuming a positive reaction to that."

Dealers were already upbeat after a US Labor Department report Friday showed the economy added 223,000 jobs in April and unemployment fell to a seven-year low 5.4 percent.

While the growth was not as much as expected, analysts say it was strong enough to suggest the economy was picking up but not enough that the Federal Reserve would feel comfortable raising interest rates soon.

On Wall Street the Dow rose 1.49 percent, S&P 500 jumped 1.35 percent and the Nasdaq was up 1.17 percent.

The dollar edged up to 119.83 yen from 119.77 yen in New York.

The euro fetched $1.1161 and 133.72 yen in Tokyo against $1.1208 and 134.25 yen.

The single currency was under pressure as investors await the meeting in Brussels, with Greece's Prime Minister Alexis Tsipras saying he was hoping for a positive statement on the country's progress in negotiating a debt reform deal.

Athens needs at least a portion of its 7.2 billion euros in remaining bailout loans so it can service its debts and avert a default that would likely see it crash out of the eurozone.

"The to-ing and fro-ing on Greece" is weighing on the euro, said Joseph Capurso, a strategist at Commonwealth Bank of Australia in Sydney. And he warned of further uncertainty, saying the talks will probably be "kicking the can down the road for a while longer".

Oil prices were mixed. US benchmark West Texas Intermediate for June delivery fell seven cents to $59.32 while Brent crude for June rose 11 cents to $65.50.

Gold fetched $1,189.26 from $1,187.01 late Friday.


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