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Asia Markets Recover From Friday’s Slump; China Keeps Benchmark Loan Prime Rates Steady

In today’s trading session, the Asian stock market rebounded from Friday’s slump as investors turned their attention to new data releases from China, Japan, and South Korea this week.

 

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On Friday, the stock market experienced a sharp decline following Israel’s strike on Iran, resulting in a drop in stocks and an increase in demand for safe-haven assets. 

Conversely, China has kept its benchmark lending rates unchanged during the monthly fixing on Monday, aligning with market expectations. 

The unchanged monthly LPR fixings come after China released positive first-quarter economic data, reducing the pressure on Beijing to implement monetary stimulus measures to support economic recovery.

Meanwhile, a weak Yuan, uncertainty surrounding the timing of the first Federal Reserve interest rate hike, and declining net interest margins (NIMs) at commercial banks persist, limiting easing efforts. Given that the first-quarter gross domestic product (GDP) growth surpassed the yearly target of about 5%, market analysts and traders anticipate that the policy stance will remain unchanged at the upcoming Politburo meeting. 

China’s economy expanded by 5.3% year-on-year, surpassing analysts’  forecasts, which is a positive development for policymakers aiming to bolster demand and confidence amidst a prolonged property crisis. 

However, Chinese banks provided 3.09 trillion yuan in new yuan loans in March, an increase from February’s 1.45 trillion yuan but falling below analyst projections. 

The Hang Seng index surged by nearly 2%, while mainland China’s CSI 300 slipped by 0.3% and closed at 3,530.9 following the LPR announcement. The Nikkei 225 index closed 1% higher at 37,438.61 with the broad-based Topix seeing a large gain of 1.38% to end at 2,662.46.

South Korea’s Kospi also increased by 1.45% to close at 2,629.44. In Australia, the S&P/ASX 200 started the week higher surging by 1.08% at 7,649.20.

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Sophia Cruz
Financial Writer - Asian & European Desks
Sophia is an experienced writer, reporter and newsdesk member, mostly on the financial sectors. For the past 5 years Sophia has covered a wide variety of topics such as the financial markets, economics, technology, fin-tech and trading. Sophia has been a part of the FX Leaders team since 2017 and works on producing valuable content and information for traders of all levels of experience.
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