Asian Stocks Advance With Europe Futures on Rate Cuts; Oil Drops
By Jae Hur and Adam Haigh - May 7, 2013
Asian shares climbed with European stock-index (AS51) futures and the Australia dollar weakened to a two- month low as the Reserve Bank of Australia joined the European Central Bank in cutting interest rates to record lows to sustain economic growth. Oil fell as the yen rallied.
The MSCI Asia Pacific Index added 1.2 percent as of 7:15 a.m. in London. The Topix (TPX) Index led regional gains with a 3.1 percent advance as trading resumed after Japanese holidays. Euro Stoxx 50 Index futures rose 0.3 percent, while Standard & Poor’s 500 Index futures slipped 0.1 percent. The yen rose 0.3 percent to 99.08 per dollar, while the so-called Aussie slid as much as 0.7 percent to $1.0178, the lowest since March 4. Crude declined 0.7 percent.
The RBA cut its benchmark rate by a quarter percentage point to 2.75 percent today to bolster an economy that’s been weakened by the strong Aussie dollar. ECB President Mario Draghi said yesterday that further interest-rate cuts are possible after reducing them to an all-time low last week.
“Investors like to be reassured from central banks that we are on the straight and narrow,” said James Lindsay, an Auckland-based fund manager at Tyndall Investment Management Ltd., which oversees about $23 billion. “Until economies really start to fire, I can’t see any pull-back of stimulus.”
The S&P 500 (SPX) gained 0.2 percent yesterday, reaching a record high. Financial shares led gains after data last week that showed American employers added more workers in April than economists had forecast.
The Reserve Bank of Australia “judged that a further decline in the cash rate was appropriate to encourage sustainable growth in the economy,” Governor Glenn Stevens said.
AI
