Asian stocks gain after Chinese assurances over slowdown

Annabelle Liang, The Associated Press</span>
Published Monday, October 22, 2018 5:24AM EDT

SINGAPORE -- Asian markets advanced Monday, lifted by Chinese benchmarks after officials put a positive spin on the country's slowing economy.

KEEPING SCORE: The Shanghai Composite index jumped 4.2 per cent to 2,656.65 and the Hang Seng in Hong Kong surged 2.2 per cent to 26,123.24. Japan's Nikkei 225 index reversed early losses, gaining 0.4 per cent to 22,614.82 and the Kospi in South Korea added 0.1 per cent to 2,158.81. Australia's S&P-ASX 200 countered the trend, shedding 0.6 per cent to 5,904.90. Shares rose in Taiwan, Singapore and the Philippines but were flat in Indonesia.

WALL STREET: Better-than-expected earnings reports by companies such as Procter & Gamble, American Express and PayPal gave U.S. indexes an early lift on Friday. But the momentum was lost when data showed that U.S. home sales fell for the sixth month in a row. The S&P 500 index was less than 0.1 per cent lower at 2,767.78. The Dow Jones Industrial Average finished 0.3 per cent higher at 25,444.34, while the Nasdaq composite fell 0.5 per cent to 7,449.03. The Russell 2000 index of smaller-company stocks tumbled 1.2 per cent to 1,542.04, its lowest in almost six months, partly because of worries over rising interest rates.

CHINESE GROWTH: The Chinese economy grew at a 6.5 per cent annual pace, its slowest since 2009, in the quarter ending in September. Officials quickly moved to calm nerves surrounding growth that was softening even before Washington raised tariffs on hundreds of billions of dollars in Chinese goods. The Chinese stock market has sagged 30 per cent since January. China's economic czar, Vice Premier Liu He, said the decline was "creating good investment opportunities."

ANALYST'S TAKE: "Official voices pledging their support has helped to calm Chinese markets. Some investors are bargain hunting on the basis that there will be limited downsides," said Song Seng Wun, an economist at CIMB Private Banking. "There has also been a hint of state support in the aftermath, with state-linked funds coming to buy weakening markets, giving investors reason to believe that the markets would stabilize," he added.

ENERGY: Benchmark U.S. crude rose 50 cents to $69.62 per barrel in electronic trading on the New York Mercantile Exchange. The contract added 0.7 per cent to $69.12 a barrel in New York. Brent crude, used to price international oils, picked up 33 cents to $80.11 per barrel. In the previous session, it gained 0.6 per cent to $79.78 a barrel.

CURRENCY: The dollar strengthened to 112.72 yen from 112.56 yen on Friday. The euro rose to $1.1533 from $1.1516.

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