Asia stocks jump as China, Europe step up stimulus

Sun Nov 23, 2014 9:09pm EST
 
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By Wayne Cole

SYDNEY (Reuters) - Asian share markets were broadly higher on Monday as the prospect of further policy stimulus in China and Europe whetted risk appetites while sending the euro skidding.

The single currency was near 28-month lows having shed 1.2 percent on Friday when European Central Bank President Mario Draghi surprised by declaring his commitment to fighting deflation.

That came hot on the heels of an unexpected cut in interest rates from the People's Bank of China, and sources told Reuters Beijing was ready to ease further to head off slowing inflation.

"China's rate cut adds to the determination of global policy makers to avoid deflation and support growth," said Shane Oliver, head of investment strategy at fund manager AMP Capital in Sydney.

"While U.S. quantitative easing may have ended, it's being replaced by QE in Japan and Europe and rate cuts in China," he added. "This in turn augurs well for shares and other growth assets."

Wasting no time, Chinese stock markets rallied, with a key index at its highest level in around one-and-a-half years.

The CSI300 Index .CSI300 of the largest companies listed in Shanghai and Shenzhen opened up 1.2 percent at its highest level since June 2013, while the Shanghai Composite Index .SSEC opened up 0.8 percent. Stocks in Hong Kong were also up 1.9 percent.

Tokyo's market was closed for a holiday on Monday, but MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS jumped 1.3 percent - its biggest daily gain in a month. Australia's main index .AXJO climbed 1 percent.   Continued...

 
Pedestrians with umbrellas walk past an electronic board showing Japan's Nikkei average (top middle L) and the exchange rates between the Japanese yen and the U.S. dollar (top middle R), outside a brokerage in Tokyo November 11, 2014. REUTERS/Yuya Shino