Stocks in Asia extended their gains on Friday as risk appetite across financial markets received a further boost from China’s latest stimulus measures, as well as upbeat US momentum.
The Nikkei (^N225) rose 2.3% on the day in Japan, while the Hang Seng (^HSI) jumped 3.1% in Hong Kong. The Shanghai Composite (000001.SS) was 2.9% up by the end of the session.
China stocks enjoyed their best week this week since 2008 as the People’s Bank of China cut the amount banks must hold in reserve, releasing an estimated $142.6bn (£106.6bn) in liquidity into the financial market. It comes as leaders embark on one of their biggest drives in years to kickstart growth.
The bank also cut the seven-day reverse repo rate, the short-term interest paid by the central bank on loans from commercial lenders, from 1.7% to 1.5%.
Overnight, the Shanghai Stock Exchange encountered glitches that hindered order processing and caused delays after the market opened on Friday. This led to a 6.4% increase in the Shenzhen index (399001.SZ), as local media reported that investors flocked to that smaller market during the delay. Trading returned to normal by noon.
The Japanese yen fell by 1% to three-week lows as the ruling Liberal Democratic Party conducted a leadership election that will determine who is Japan’s next prime minister. The change in leadership is not expected to lead to any major policy shifts, given the similarities between the leading contenders.
On Wall Street, the S&P 500 (^GSPC) scored a record closing high, up 0.4% to 5,745.37. The blue-chip Dow Jones (^DJI) rose 0.6% to finish at 42,175.11. The Nasdaq Composite (^IXIC) advanced 0.6%, to 18,190.29.
The yield on 10-year US Treasury notes, which influence investment decisions around the globe, rose to 3.80% yesterday evening from 3.79% late on Wednesday.
