Daily Times

Hong Kong, Oct 10 (AFP/APP):Asian markets tracked a record day on Wall Street Thursday, with Shanghai and Hong Kong surging after China’s central bank unveiled a facility to boost liquidity for firms to buy stocks.

The yen sat around two-month lows after taking a hit in the wake of minutes showing Federal Reserve decision-makers were split on last month’s bumper interest rate cut and a top official sparking questions about how many more could be in the pipeline.

Chinese investors were settling down after a volatile start to the week that saw mainland and Hong Kong markets whipsaw as the euphoria over last month’s stimulus was dampened by a news conference that failed to unveil more measures or give details on those already announced.

Traders welcomed news that the People’s Bank of China had released details of a “swap facility” that will allow “qualified securities, funds and insurance companies” to access more than $70 billion in liquidity to purchase equities.

The move, one of a number of measures announced last month, helped Shanghai rise three percent at one point, having dived more than six percent Wednesday — its worst day in more than four years.

Hong Kong was up more than four percent, building on the previous day’s advance that followed a more than nine percent plunge, its heftiest in 16 years. Dealers are now keenly awaiting a Saturday finance ministry news conference on fiscal policy, though observers warned the bar would be high for Finance Minister Lan Fo’an if he is to get the recent market rally back on track. Richard Tang, China strategist and head of research for Hong Kong at Julius Baer, said: “Market disappointment at (Tuesday’s briefing) helps investors lower their elevated expectations for the policy measures.” “We believe the consensus is expecting around 2-3 trillion yuan… of fiscal stimulus measures,” he added.

“The market had generally baked in expectations of some sorts of cash handouts to the underprivileged and/or consumption vouchers, policies to help relieve the funding challenges of local governments at least temporarily, and more policies to address the housing inventory problem.”

The gains led a rally across Asia, which came after the Dow and S&P 500 chalked up fresh records on Wall Street thanks to a burst from tech giants including Amazon and Apple.