MSCI’s broadest index of Asia-Pacific shares outside Japan slid 0.1%, pulling away from its highest level since January hit on Monday
Asian shares were pinned below 1-1/2 month peak on Tuesday as even a larger-than-expected interest rate cut in China failed to excite investors jaded at the lack of bigger stimulus measures.
China’s five-year loan prime rate was lowered by 25 basis points to 3.95%, bigger than the five to 15 basis point cuts forecast by economists. The Shanghai Composite, however, dropped 0.7% in early trade and blue chips declined 0.6%.
It is a vital cut, showing policymakers are serious, said OCBC for strategist Christopher Wong, and ought to support currencies like the Australian dollar.
But it remains to be seen if it is sufficient to keep momentum sustained, Wong added.
Markets are still on the lookout for more fiscal support measures, in particular targeting consumption, he said.
The yuan was steady at 7.1972 per dollar. Elsewhere Japan’s Nikkei opened flat to stay below but close to topping its 1989 record high.
MSCI’s broadest index of Asia-Pacific shares outside Japan slid 0.1%, pulling away from its highest level since January hit on Monday. South Korean shares dropped 1%.
Tuesday moves in currency markets were fairly modest, with the dollar strong and pushing above 150 Japanese yen.
The New Zealand dollar paused a recent jump to steady at $0.6138 as traders weigh the risk of a surprise interest rate hike next week.
The Australian dollar inched down 0.2% at $0.6529 though meeting minutes showed the central bank is not sure it’s finished with rate hikes yet.
In Australia, ANZ Bank shares dropped 3.5% and Suncorp shares added nearly 6% after ANZ’s buyout of Suncorp’s banking business was cleared by the competition tribunal.
