Article by ForexTime
Gains across markets in Asia on Monday came on the heels of a positive reaction by US and European markets after the People’s Bank of China decided on Friday to cut benchmark interest rates for the sixth time in 12 months and free up more cash held by commercial banks. The PBOC cut its benchmark interest rate by 0.25 percentage point to 4.35 per cent. It also lowered the reserve requirement ratio for commercial banks by 0.5 percentage point to 17.5 per cent
Japan’s Nikkei was up 1.1 per cent and Australia’s S&P/ASX 200 was 0.2 per cent higher.
China’s Shanghai Composite was up 0.7 per cent while the tech-heavy Shenzhen Composite was 0.4 per cent higher. Hong Kong’s Hang Seng was ahead by 0.6 per cent, with just three of its 50 members in negative territory.
The Australian dollar was up 0.4 per cent at US$0.7243 and benefiting from hopes China’s decision to cut interest rates will support economic growth.
The Japanese yen strengthened 0.2 per cent to Y121.12 for its first advance in eight sessions, ahead of Friday’s Bank of Japan monetary policy meeting, at which there are some expectations that the central bank may ease monetary policy further in a bid to invigorate the economy.
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The dollar index, a gauge of the US currency versus a basket of global peers, was 0.1 per cent lower at 97.02 and facing its first decline in four sessions ahead of the conclusion of the Federal Reserve’s October policy meeting on Wednesday.
Commodity prices remained under pressure. Oil extended a slide from the previous session, with Brent crude down 0.3 per cent at $47.86 a barrel, and West Texas Intermediate down 0.2 per cent at $44.50. Gold was flat at $1,164.18 an ounce.
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