Japanese Stock Futures Rise as China Cuts Interest Rate
Japanese and Australian stock futures rose, with the Nikkei 225 Average poised for its first weekly gain in 10 weeks, after China cut its benchmark interest for the first time since 2008.
American Depositary Receipts of BHP Billiton Ltd. (BHP), the world’s largest mining company, climbed 3.1 percent from the closing price in Sydney. ADRs of Komatsu Ltd. (6301), a Japanese mining-equipment maker, gained 0.8 percent. Terumo Corp. (4543) may be active in Tokyo after Barclays Plc recommended buying shares of Asia’s largest medical devices company.
Futures on Japan’s Nikkei 225 Stock Average expiring in September closed at 8,620 in Chicago yesterday, up from 8,610 in Osaka, Japan. They were bid in the pre-market at 8,650 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index advanced 0.3 percent today. New Zealand’s NZX 50 Index rose 0.2 percent in Wellington.
“It does show Beijing is willing to do whatever it takes to support growth and to boost confidence,” said Qu Hongbin, Hong Kong-based co-head of economic research at HSBC Holdings Plc. “Get ready for more decisive easing.”
China cut borrowing costs for the first time since 2008 and loosened controls on banks’ lending and deposit rates, stepping up efforts to combat a deepening slowdown as Europe’s debt crisis threatens global growth.
The benchmark one-year lending rate will drop to 6.31 percent from 6.56 percent effective today, the People’s Bank of China said on its website yesterday. The one-year deposit rate will fall to 3.25 percent from 3.5 percent.
Billionaire Kenneth Fisher, who bought Chinese shares as they rallied from a 2-1/2 year low in the fourth quarter, said the stocks will beat global equities as the government takes further steps to boost growth.
China will loosen monetary policy for another 12 to 18 months after yesterday’s announcement, Fisher, chief executive officer of Fisher Investments, said in a telephone interview yesterday. China represents about 6 percent of the Woodside, California-based firm’s holdings, a bigger proportion than in benchmark indexes, Fisher said.
The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese companies in the U.S. rose 0.5 percent to 90.62 in New York for a three-day advance of 4.5 percent, the biggest since March 9.
Futures on the Standard & Poor’s 500 Index were little changed today. The gauge closed little changed yesterday, paring earlier gains as Federal Reserve Chairman Ben S. Bernanke said the central bank will assess the U.S. economy before deciding if more stimulus is needed and after a report that Greece’s upcoming election could be derailed.
In Spain, Prime Minister Mariano Rajoy said he’s talking to his European peers about how to shore up the country’s banks as Fitch Ratings cut Spain’s credit grade to within two steps of junk. Spain is trying to overcome German opposition to allowing the euro region’s bailout funds to sidestep governments and recapitalize lenders directly.
The MSCI Asia-Pacific (MXAP) posted its biggest three-day gain since Dec. 5 through yesterday amid speculation global policy makers will move to stimulate economic growth. The Asian benchmark gauge has still dropped 12 percent from its peak this year on Feb. 29. amid concern growth is slowing in China and the U.S. as Europe’s debt crisis deepens.
The MSCI Asia-Pacific fell 0.7 percent this year through yesterday, compared with a 0.8 percent drop on the Stoxx Europe 600 Index and a 4.6 percent gain on the S&P 500. Declines in regional equity markets cut the average price of stocks on the Asian benchmark to 11.5 times estimated earnings. That compares with 12.6 times for the S&P 500 and a multiple of 10.1 for the Stoxx 600.
The London Metal Exchange Index of prices for six industrial metals including copper and aluminum gained 1.2 percent yesterday.
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