China’s central bank announced over the weekend that it would expand a pilot program that would boost banks’ lending abilities.
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“The market has widely interpreted the move as China’s version of quantitative easing”, said Jacky Zhang, analyst at BOC global.
Shaking off a negative open, Malaysia’s FTSE Bursa Malaysia KLCi charged up 0.6 percent while Singapore’s Straits Times index clawed back losses to hover in neutral territory.
The rebound in Chinese stocks in Hong Kong has room to run, Sanford C. Bernstein & Co sales trader and chartered market technician Ayush Nagaraj said.
Hong Kong has raised $21 billion so far this year through IPOs, despite a quiet third quarter, making it the top global listing venue.
The ASX 200 in Australia is the exception to the rule with index now down 0.76% at 5,239.30 points led by weakness in utilities, energy and healthcare stocks.
“There now appears to be decent investor appetite from yield seeking carry traders who are looking to capitalise on the likelihood the U.S. Fed will delay a rate hike until March 2016 and possibly beyond”, said Stephen Innes, senior trader at FX firm OANDA Australia and Asia Pacific. Australian shares underperformed due to profit taking after big gains last week as investors wait for Chinese import and export numbers to be published on Tuesday. In August, China reported a 6.1% decline on year. “I would be cautious”. The dollar has risen significantly against most of its emerging-market rivals in 2015 as investors brace for an interest-rate increase by the Federal Reserve, which would make the buck more attractive by increasing the return on deposits and dollar- denominated assets.
South Korea’s benchmark Kospi closed flat, up just 0.1% at 2,021.63. The dollar traded as high as 4.41 ringgit early Monday.
Gold jumped to a seven-week high, boosted by the weaker dollar and the USA rate outlook.
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The People’s Bank of China set the yuan’s midpoint against the United States dollar at 6.3406 on Monday, firmer for the seventh straight trading day, as the currency hit monthly highs against the greenback in both onshore and offshore trading. Its guidance brought the onshore yuan to its strongest level against the US dollar since Beijing devalued the yuan. The index was trading below 95, its lowest levels in a month, according to Thomson Reuters data.
