Asian markets start on upbeat note

Hong Kong: Most Asian markets started today on a positive note to build on last week’s gains after China unveiled fresh stimulus measures and below-par US jobs data reinforced expectations the Federal Reserve will cut interest rates this month.

The People’s Bank of China on Friday said it would slash the amount of cash lenders must keep in reserve to its lowest level in 12 years, freeing up more than USD 100 billion for the stuttering economy.

The announcement came two days ahead of the release of figures showing a contraction in imports and exports as the trade war with the United States bites deeper, with speculation that further measures could be on the way.

“Concerns of a more protracted trade war have already sapped business confidence in China and any way you want to slice and dice the data at the end of the day it makes for a convincing argument for the PBoC to turn on the monetary taps,” said Stephen Innes, Asia-Pacific market strategist at AxiTrader.

Asian investors were broadly upbeat on the move, while a weaker-than-forecast reading on US jobs creation increased the chance the Fed will reduce borrowing rates again at its policy meeting this month.

The news suggested the world’s number-one economy was also feeling the pinch from the trade row and the bank’s boss Jerome Powell said in a speech Friday it will ‘continue to act as appropriate to sustain this expansion’, while noting ‘significant risks’ to growth.

Agency