Asian stocks rose after China cut interest rates for the third time in six months and U.S. shares jumped Friday following an official jobs report.
China Overseas Land & Investment Ltd. climbed 4.1 percent in Hong Kong as mainland developers rallied on lower borrowing costs. Woodside Petroleum Ltd. climbed 2.1 percent in Sydney as energy shares rose most among the MSCI Asia Pacific Index’s industry groups. Toshiba Corp. sank the most in four years in Tokyo after the electronics manufacturer withdrew its earnings forecast pending an internal probe into its accounting. Sharp Corp. plunged 26 percent after the maker of displays said it was considering reducing capital and selling shares.
The MSCI Asia Pacific Index added 0.4 percent to 151.73 as of 4:24 p.m. in London. The Shanghai Composite Index surged 3 percent after the People’s Bank of China eased policy as weak data added to signs Asia’s largest economy may struggle to reach its growth goal.
“Given that China’s growth and inflation are below targets, additional stimulus seems to be the right response,” Steven Milch, chief economist at Suncorp Wealth Management in Sydney, said by phone. “Versus bonds, equities don’t look stretched but if you look at PE ratios on some markets, whether it’s the U.S. or Australia, you could conclude that markets are above fair value. Some of that has been corrected in the last couple of weeks.”
Shares on the Asian benchmark index traded at 14.4 times estimated earnings as of Friday, compared with 17.9 for the Standard & Poor’s 500 Index and 17.7 for the Shanghai Composite Index, according to data compiled by Bloomberg.
The Shanghai Composite Index more than doubled over the past year amid speculation the government will do more to boost growth. The 5-day volatility on the index climbed to the highest in more than three months as the nation’s longest bull market continued.
Shanghai’s equity benchmark plunged 5.3 percent last week amid concerns about new share sales, margin-trading growth and trade. Friday’s data showed overseas shipments unexpectedly fell 6.2 percent in April, while a Saturday report showed consumer price gains missed estimates.
The People’s Bank of China reduced its one-year lending and deposit rates by a quarter point each. In another step to free up interest rates, the monetary authority will also raise the limit on what banks can pay savers.
The Hang Seng China Enterprises Index of mainland companies traded in Hong Kong increased 1 percent, while the city’s benchmark Hang Seng Index rose 0.5 percent.
Japan’s Topix index climbed 0.7 percent and South Korea’s Kospi index added 0.6 percent. Singapore’s Straits Times Index advanced 0.5 percent. Taiwan’s Taiex index lost 0.3 percent. New Zealand’s NZX 50 Index gained 0.2 percent. Australia’s S&P/ASX 200 Index slipped 0.2 percent, erasing gains of as much as 1.1 percent.
The Standard & Poor’s 500 Index was little changed. The benchmark index gained 1.4 percent on Friday after data showed U.S. employers added 223,000 workers to nonfarm payrolls in April, after a revised 85,000 increase in March that was the smallest since June 2012.
The jobless rate fell to 5.4 percent from 5.5 percent, the lowest since May 2008. While a futures-based measure indicates the Federal Reserve remains on track to raise rates this year, the data make a increase in June less likely.