SYDNEY: Chinese stocks raced toward their best week since 2008 and helped lift Asian shares to 2-1/2-year highs after Beijing rolled out a huge stimulus package to revive the economy, while a sharp fall in oil prices bodes well for disinflation globally.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.5%, having hit its highest level since February 2022 earlier in the day. It was headed for a weekly gain of 5.3%, thanks to a huge turnaround in Chinese shares.Hong Kong's Hang Seng index also gained 1.9% and was up 11.2% for the week, its best performance since 2009.
As flagged, the People's Bank of China on Friday lowered banks' reserve requirement ratio by 50 basis points and cut the 7-day reverse repo rate by 20 bps. It also cut the 14-day reverse repo rate by 20 bps, the second reduction this week. Oil was a loser and set for heavy weekly losses on a report that Saudi Arabia was preparing to abandon its unofficial price target of $100 a barrel for crude as it gets ready to increase output.
The dollar rose 1% to 146.23 yen after the first round of balloting. The Nikkei rallied 1.8% and was up 5% for the week on the back of a weak yen.