AP – World shares have mostly gained after China’s central bank released plans for supporting the stock market through share repurchases by companies and major shareholders.
European markets opened mostly higher, with Germany’s DAX up 0.2 per cent at 19,623.37. In Paris, the CAC 40 gained 0.4 per cent to 7,615.72. Britain’s FTSE 100 slipped 0.1 per cent to 8,376.04.
The European Central Bank on Thursday cut its main interest rate by a quarter of a percentage point, helping send shares higher.
The future for the S&P 500 was up less than 0.1 per cent while that for the Dow Jones Industrial Average was little changed.
Beijing also reported yesterday that the Chinese economy slowed further in the last quarter, which spurred expectations the government will ramp up its latest stimulus efforts.
The world’s second-largest economy expanded at a 4.6-per-cent annual pace in July-September, down slightly from 4.7 per cent in the previous quarter. Growth so far this year has averaged to 4.8 per cent, below the official target of about five per cent, as weakness in the property market has continued to weigh on demand.
Meanwhile, the central bank issued guidelines for state banks to provide loans to companies and major shareholders for stock repurchases as part of an effort to stabilise China’s share markets, which have languished in recent years.
The loans, which can be made only by 21 designated financial institutions, will have a maximum interest rate of 2.25 per cent, the People’s Bank of China said in a statement that underscored plans for strict oversight of the effort to support the markets.
The news helped drive a rally in Shanghai, where the Composite index gained 2.9 per cent to 3,261.56. The benchmark for the smaller market in the southern city of Shenzhen jumped 4.1 per cent.
Shanghai’s benchmark has gained nine per cent in the past three months, though it had surged much higher last month with the release of new measures to counter the slowdown, before falling back as investors registered their disappointment over a lack of big government spending initiatives.
Hong Kong’s Hang Seng index gained 3.6 per cent to 20,791.20.
Also yesterday, China’s large state-run banks cut their deposit rates, to 0.1 per cent from 0.15 per cent for demand deposits and to 1.1 per cent from 1.35 per cent for longer term deposits.
Elsewhere in Asia, Tokyo’s Nikkei 225 edged 0.2 per cent higher to 38,981.75 and the Kospi in Seoul shed 0.6 per cent to 2,593.82. Australia’s S&P/ASX 200 gave up 0.9 per cent to 8,283.20.
The Taiex in Taiwan gained 1.9 per cent and the SET in Bangkok was up 0.3 per cent. India’s Sensex rose 0.2 per cent.
On Thursday, United States (US) stocks drifted around their record heights following the latest signals that the US economy continues to hum.
The S&P 500 finished virtually unchanged at 5,841.47 after flirting with its all-time high for much of the day. The Dow Jones Industrial Average added 0.4 per cent to 43,239.05, besting its own record set the day before.
The Nasdaq composite added less than 0.1 per cent to 18,373.61.
Nvidia and other companies in the chip industry were some of the market’s strongest after global heavyweight Taiwan Semiconductor Manufacturing Co reported bigger profit for the latest quarter than analysts expected.
