May 11, 2015 5:18 AM
China rate cut spurs Asia stock markets, Europe falls
The Associated Press
HONG KONG (AP) Chinese stocks led Asian benchmarks higher Monday after the country's central bank cut interest rates for the third time in six months, hoping to reinvigorate waning growth in the world's No. 2 economy. European shares retreated ahead of more talks on Greece's bailout.
KEEPING SCORE: France's CAC 40 was down 1.5 percent at 5,013.89 and Germany's DAX shed 0.5 percent to 11,646.87. Futures augured losses on Wall Street after the U.S. stock market ended last week with its best day in two months on good news about the job market. Dow futures fell 0.1 percent to 18,100.00. S&P 500 futures shed 0.1 percent to 2,106.00.
CHINA CUT: On Sunday, the People's Bank of China cut interest rates for the third time in half a year in a fresh bid to shore up sputtering economic growth. The central bank's latest move came after trade data released on Friday showed imports and exports declined in April suggesting domestic and foreign demand are slowing. At the same time, inflation remains low, giving policymakers leeway to ease monetary policy as they strive to keep growth from falling below a 7 percent target.
ASIA SCORECARD: The Shanghai Composite Index in mainland China jumped 3 percent to 4,333.58 and Japan's Nikkei 225 rose 1.3 percent to 19,620.91. South Korea's Kospi gained 0.6 percent to 2,097.38 and Hong Kong's Hang Seng added 0.5 percent to 27,718.20. Australia's S&P/ASX 200 dipped 0.2 percent to 5,625.20. Markets in Southeast Asia mostly rose.
THE QUOTE: With their latest easing move, China's policymakers are trying to walk a fine line between stimulating the economy and avoiding adding even more froth to China's stock market, which has more than doubled in the past year, analysts said. "It's only a quarter percent cut, which on one hand leaves room for a lot more aggressive move," said Nicholas Teo, analyst at CMC Markets in Singapore. "On the other hand we've seen potential for asset inflation in the market itself, so I think they came out with the best they could at this point in time and maybe buy themselves a bit more time."
EUROPE MEETING: Eurozone finance ministers will meet Monday amid slow-moving talks on a deal with Greece's creditors that would keep it in the euro currency bloc. German Finance Minister Wolfgang Schaeuble told the Frankfurter Allgemeine Sonntagszeitung in an interview published Sunday that he doesn't think "everything will be cleared up by then." Greece needs an agreement within weeks as it is running out of cash. The current talks are intended to clear the release by creditors of the final 7.2 billion euro ($8.1 billion) installment of Greece's 240 billion euro bailout. Germany is the largest single contributor to the bailout.
ENERGY: Benchmark U.S. crude slipped 3 cents to $59.35 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 45 cents to close at $59.39 a barrel on Friday. Brent crude fell 37 cents to $65.78 in London.
CURRENCIES: The dollar strengthened to 119.91 yen from 119.79 in late trading Friday. The euro slipped to $1.1170 from $1.1223.