China Stocks Lead Asia Gains On Hopes Of Economic Pickup

Stocks in Asia extended gains on Wednesday after Chinese authorities eased liquidity to boost economic growth. The gains were also fuelled by Wall Street posting a new record on further rate cut hopes after a disappointing consumer confidence report.

The equity benchmarks in Mainland China and Hong Kong were trading higher by over 2%. The South Korean Kospi was up 0.15% at 2,635, while the Japanese Nikkei was up 0.23% at 38,028 as of 7:49 a.m.

After reports of a deepening crisis, the People's Bank of China slashed banks' reserve requirement ratio and outstanding mortgage rates on Tuesday. The panel decided to cut the 7-day reverse repo rate to 1.5% from 1.7%.

On Monday, the central bank lowered its 14-day reverse repurchase rate to 1.85% from 1.95% to boost the economy.

The PBOC panel said it might lower RRR again by 0.25-0.5 percentage point, depending on the liquidity condition. "Actions today to have a neutral effect on banks' margins."

Golden Dragon index of US-listed Chinese companies rallied 9.1% in New York trading on Tuesday, the best since 2020, according to Bloomberg.

Data points such as Australia’s August CPI print and China's one-year medium-term facility rate will be the key focus on Wednesday.

The US stocks hit fresh records with the S&P 500 index notching its 41st record close of the year, shrugging off the disappointing consumer data.

The consumer confidence in the US in September marked the biggest decline in three years on concern about the labour market. Meanwhile, comments from multiple Fed governors hint at more easing in the upcoming meets.

The S&P 500 and the tech-heavy Nasdaq Composite advanced 0.25% and 0.56%, respectively. The Dow Jones Industrial Average rose by 0.20%.

Crude oil prices were little changed after logging its biggest gain in a week as tensions rose with the Israel-Lebanon war. Brent crude was trading 0.20% lower at $75.02 a barrel as of 7:54 a.m. IST. West Texas Intermediate was down 0.24% at $71.39.

• US Dollar Index at 100.27

• US 10-year bond yield at 3.73%.

• Brent crude down 0.20% at $75.02 per barrel.

• Bitcoin was 0.3% up at $64,416.92

• Gold spot was up 0.24% at $2,663.52