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World stock markets mostly higher following China rate cut
World stock markets were mostly higher Monday as a weekend interest rate cut by the Chinese central bank lifted sentiment following a lower estimate of U
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orld stock markets were mostly higher Monday as a weekend interest rate cut by the Chinese central bank lifted sentiment following a lower estimate of U.S. economic growth last quarter.
KEEPING SCORE: Britain's FTSE 100 gained 0.3 percent to 6,964.66 and Germany's DAX climbed 0.3 percent to 11,428.83. France's CAC 40 slipped 0.2 percent to 4,940.62. Wall Street looked set for an upbeat start to the week. Dow futures were up 0.2 percent and S&P futures added 0.1 percent. Hopes for stronger growth in China boosted mining companies and other resource-related shares, such as miner BHP Billiton, which rose 0.4 percent and Glencore Plc, which added 1.8 percent.
CHINA RATE CUT: The People's Bank of China cut interest rates for the second time in three months Saturday, reducing the rate for one-year loans by commercial banks by 0.25 percentage point to 5.35 percent. The interest rate paid on a one-year deposit was lowered by 0.25 point to 2.50 percent. The latest round of cuts follow tax reductions and other measures meant to prop up growth. The government cut business taxes last week and has announced a pay hike for civil servants.
THE QUOTE: "News of China's rate cut should help buyer mood ... compensating for a weak lead from the US market," said Ric Spooner, chief market analyst at CMC in Sydney. "However, while news of lower borrowing costs will help support equity valuations and be seen as a positive for commodity demand, market response may be limited. In some senses this rate cut is a technical response to the fact that lower inflation is making real borrowing costs more expensive in China. "
US PROSPECTS: U.S. GDP growth in the fourth quarter was revised down to 2.2 percent from an earlier estimate of 2.6 percent. The revised pace is on a par with the average of the past five years and indicative of a less robust recovery than some analysts had believed. That news countered upbeat data on housing and consumer confidence.
ASIA'S DAY: Japan's Nikkei 225 gained 0.2 percent to 18,826.88 and South Korea's Kospi added 0.6 percent to 1,996.81. Hong Kong's Hang Seng Index rose 0.3 percent to 24,887.44 and the Shanghai Composite Index advanced 0.8 percent to 3,336.28. Australia's S&P ASX/200 jumped 0.5 percent to 5,958.90. Southeast Asian markets were mixed.
ENERGY: Benchmark U.S. crude oil was down 55 cents to $49.20 a barrel in electronic trading on the New York Mercantile Exchange. It gained $1.59 on Friday to $49.76 a barrel. Brent crude, a key indicator for global oil prices, fell 60 cents to $61.98 a barrel in London.
CURRENCIES: The dollar rose to 119.93 yen from 119.63 late Friday. The euro gained to $1.1208 from $1.1199.
