The major Asia-Pacific stock indexes finished mostly higher on Friday, led by South Korea, which posted a huge recovery after a steep sell-off the previous session. Traders said the gains were fueled by a move by China to keep its loan prime rates unchanged. Markets in Japan were closed on Friday for a holiday.
On Friday, Hong Kong’s Hang Seng Index settled at 22805.07, up 1095.94 or +5.05% and South Korea’s KOSPI Index closed at 1566.15, up 108.51 or +7.44%.
China’s Shanghai Index settled at 2745.62, up 43.49 or +1.61% and Australia’s S^P/ASX 200 Index finished at 4816.60, up 33.70 or +0.70%.
Most Markets Rally as Volatile Week Ends
Most Asia-Pacific shares rallied on Friday, wrapping up a volatile week that saw heavy selling and sharp rebounds, as broad stimulus measures to mitigate the coronavirus pandemic’s impact calmed investors’ nerves.
Central banks flooded the market with U.S. Dollars to ease a global scramble for the currency, besides cutting rates to help stem the impact of most countries moving into a lockdown.
China Unexpectedly Keeps Lending Benchmark Rate Unchanged
China kept its benchmark lending rate steady on Friday, defying expectations for a reduction to ease borrowing costs in an economy jolted by widespread disruptions to businesses from the coronavirus pandemic, Reuters reported.
The one-year loan price rate (LPR) was left unchanged at 4.05% from the previous monthly fixing while the five-year LPR remained at 4.75%.
This move was a surprise because 40 respondents, or 71.4% of all participants, in a snap survey had expected a reduction in the LPR, with 36 predicting either a five basis point or 10 basis point cut in the one-year tenor and no change to the five-year rate, Reuters said.
The PBOC left borrowing cost on its one-year medium-term lending facility (MLF) loans unchanged on Monday, despite its U.S. counterpart’s decision to slash interest rates to near zero to counteract the economic shock from the coronavirus outbreak.
Australia Announces Small Business Relief Package
Australian Banking Association CEO Anna Bligh today announced a small business relief package from Australia’s banks.
“This Assistance Package will apply to more than $100 billion of existing small business loans and depending on customer take up, could put as much as $8 billion back into the pockets of small businesses as they battle through these difficult time,” Ms. Bligh said.
This article was originally posted on FX Empire
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