BANGKOK– Asian shares have largely risen in value after China’s central bank announced plans to support the stock market through share buybacks by companies and major shareholders.
Beijing also reported that the Chinese economy Economic growth slowed further in the past quarter, fueling expectations that the government will step up its latest stimulus efforts. The world’s second-largest economy grew at an annual rate of 4.6% in July-September, slightly down from 4.7% in the previous quarter.
Growth is averaging 4.8% so far this year, below the official target of around 5%, as weakness in the property market continues to weigh on demand.
Meanwhile, the central bank has issued guidelines for state-owned banks to lend to companies and major shareholders for share buybacks, as part of an effort to stabilize China’s stock markets, which have languished in recent years.
The loans, which can only be provided by 21 designated financial institutions, will carry a maximum interest rate of 2.25%, the People’s Bank of China said in a statement underlining plans for strict supervision of efforts to support markets.
The news sparked a rally in Shanghai, where the Composite index rose 2.1% to 3,232.14. The benchmark for the smaller market in the southern city of Shenzhen rose 3.2%.
Shanghai’s benchmark has risen 9% over the past three months, although it rose much higher last month with the introduction of new measures to combat the slowdown, before falling back as investors expressed disappointment over a lack of major government spending initiatives .
Hong Kong’s Hang Seng index gained 2.2% to 20,519.78.
Also on Friday, China’s major state-owned banks cut their deposit rates, to 0.1% from 0.15% for demand deposits and to 1.1% from 1.35% for longer-term deposits.
Elsewhere in Asia, Tokyo’s Nikkei 225 edged 0.2% higher to 38,798.48 and Seoul’s Kospi fell 0.6% to 2,594.40. The Australian S&The P/ASX 200 lost 0.9% to 8,283.20.
Taiwan’s Taiex gained 1.9% and Bangkok’s SET rose 0.2%. The Indian Sensex fell 0.2%.
On Thursday, US stocks hovered around record highs following the latest signs that the US economy continues to hum along.
The S&The P500 ended almost unchanged at 5,841.47 after flirting it is timeless high for much of the day. The Dow Jones Industrial Average rose 0.4% to 43,239.05, beating it his own record set the day before. The Nasdaq index gained less than 0.1% to 18,373.61.
Nvidia and other chip industry companies were among the market’s strongest after global heavyweight Taiwan Semiconductor Manufacturing Co. reported a bigger profit for the last quarter than analysts expected.
But a 1.4% drop for Google’s parent company, Alphabet, and a 10.6% drop for Elevance Health helped keep stock indexes in check. Height reported weaker earnings for the final quarter than expected.
CSX then fell 6.7% lags behind analysts’ profit expectations for the last quarter. The railroad also expects only modest volume growth for the rest of the year as the Southeast rebuilds after two major rail disasters hurricanes.
In the bond market, government bond yields rose following the latest encouraging news about the US economy.
American retailers earned more sales in September than in August, and the underlying growth trends within the data were better than economists expected.
In the meantime, a separate report is available Fewer American workers have filed for unemployment benefits last week, a signal that layoffs across the country are relatively low and are not hurting the labor market.
Such data reinforces the hope that the economy could raise a perfect escape of the the worst inflation in generationsone that ends without one recession which many investors had seen as virtually inevitable. And now with the Federal Reserve lowering interest rates To keep the economy going, optimists expect that shares can rise even further.
Critics, meanwhile, warn that stock prices appear overpriced, given that they have risen much faster than corporate profits.
The European Central Bank Thursday lowered its key interest rate by a quarter of a percentage point. This caused stock indices to rise by 1.2% in France and 0.8% in Germany.
In other trades early Friday, U.S. benchmark crude gained 25 cents to $70.92 a barrel. Brent crude, the international standard, was 20 cents higher at $74.65 a barrel.
The dollar fell from 150.21 yen to 149.85 Japanese yen. The euro rose from $1.0827 to $1.0843.
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AP Business writers Stan Choe and Matt Ott contributed.