Asia stocks tick up from one-year low, China gains on RRR cut

Singapore, Dec 7 (BNA): Asian stocks rose on Tuesday as concerns over the impact of the Omicron variable eased while Chinese markets rose after the central bank eased monetary policy there.

MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.6% after falling on Monday to a one-year low.

The benchmark index has lost 6% so far this year, with Hong Kong markets among the biggest losers, while Indian and Taiwanese stocks have outperformed.

On Tuesday, Australia’s S&P/ASX200 rose 0.5%, while Japan’s Nikkei rose 1.1% as risk sentiment pushed US stocks higher.

China’s CSI300 Index rose 0.7% and Hong Kong’s Hang Seng Index advanced 1.3% as the central bank released $188 billion in liquidity through easing, Reuters reported.

The People’s Bank of China said on Monday it would cut the amount of liquidity that banks must hold in reserve, the second such step this year, while releasing funds in the form of long-term liquidity to support sluggish economic growth.

The world’s second-largest economy, which made an impressive recovery from the pandemic recession last year, has lost momentum in recent months as it grapples with a slowdown in the manufacturing sector, debt problems in the property market and the continuing outbreak of the coronavirus.

Monday’s move was a “comfortable cushion, if not a coincidence, for the looming Evergrande debt default,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, said in a note.

Shares in embattled real estate developer Evergrande surged 7% after hitting a record low on Monday as markets awaited whether the real estate giant paid out $82.5 million in coupons as a 30-day grace period approaches.

Elsewhere, markets were supported by gains on Wall Street, as economically sensitive stocks outperformed.

“While epidemiologists rightly cautioned against early conclusions on Omicron, arguably, markets expected the heavy selling last week to be more moderate,” said Varathan of Mizuho Bank.

“After all, early assessments of Omicron’s cases were declared to be moderate, resulting in half-full relief.”

Health officials said Sunday that Omicron has spread to about a third of US states, but the Delta version accounts for the majority of COVID-19 infections in the US.

Dr. Anthony Fauci, the chief US infectious disease official, told CNN that it did not appear that Omicron had a “significant degree of severity.”

Stocks on Wall Street closed a sea of ​​green as value stocks, led by banking and energy stocks, rose 1.5% compared to a 0.9% increase in stock growth.

Risk sentiment also helped lift the dollar against safe-haven currencies such as the Japanese yen, which lost 0.6% overnight, while the risk-friendly Australian dollar also found buyers.

Also supporting the dollar was the expectation that the Federal Reserve would speed up tapering of its bond-purchasing program when it meets next week in response to a tightening labor market. They are also likely to raise rates sooner than expected to keep inflation low.

Oil prices rose, bolstering a roughly 5% rebound the day before as concerns about the impact of the Omicron variable on global fuel demand eased.

Brent crude futures rose 0.6 percent to $73.5 a barrel, after closing up 4.6 percent on Monday.

Gold prices settled at $1,779.5 an ounce on expectations that US consumer price data due later this week will show an acceleration in inflation.

HF