Asian stocks are moving higher despite yesterday’s losses on Wall Street, which brought the indices closer to bear market, with investors drawing impetus from the decision of the People’s Bank of China to reduce interest rates.
On the Wall Street, the S&P 500 index lost 0.6% on Thursday, extending its losses from the January high to 18.7%. Total losses of 20% from the last high marks the entry of the market into a bear market.
The Japanese Nikkei 225 index rose 1.3% to 26,739.03 points. Government figures released today showed that inflation climbed to 2.5% in April from 1.3% the previous month. This is the first time since 2008 that inflation has exceeded the central bank’s target of 2%.
In Hong Kong, the Hang Seng index jumped 2.5%, while in mainland China the Shanghai Composite index strengthened by 1.5% after the decision of the country’s central bank to reduce the interest rate on five-year loans in a move to stimulate growth. The interest rate on one-year loans remained unchanged.
South Korea’s Kospi index gained 1.8%, while in Australia the S & P-ASX 200 strengthened by 1.1%.