Global stocks rise as China looks to boost bank lending

BEIJING - Global stocks rose Tuesday after an easing of Chinese bank lending helped to offset a weak manufacturing reading and a decline in Japanese consumer spending.

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KEEPING SCORE: In early trading, Germany's DAX gained 1.1 per cent to 9,598.15 points and France's CAC-40 added 0.3 per cent to 4,367.21. On Monday, the DAX slipped 0.2 per cent, while Britain's FTSE 100 was unchanged. The CAC-40 rose 0.9 per cent. Wall Street looked set for gains, with futures for the Dow Jones industrial average and Standard & Poor's 500 index up 0.5 per cent.

ASIA'S DAY: The Shanghai Composite Index advanced 1.7 per cent to 2,733.17 points and Hong Kong's Hang Seng gained 1.6 per cent to 19,407.46. Tokyo's Nikkei 225 added 0.4 per cent to 16,085.51 and Sydney's S&P ASX 200 gained 0.8 per cent to 4,922.30. India's Sensex galloped ahead 3 per cent to 23,689.71 while Taiwan, Singapore and New Zealand also advanced. Korean markets were closed for a holiday.

CHINA LENDING: Moving to shore up slowing economic growth, Beijing freed more money for lending by lowering the amount commercial lenders must hold in reserve. The change reduced required reserves by 0.5 per cent points effective Tuesday, which will release several hundred billion yuan (tens of billions of dollars) into the market. Chinese trading is heavily influenced by the availability of credit, so an easing can lead to higher prices.

CHINESE MANUFACTURING: A survey showed Chinese factory activity in February fell to its lowest level in five months. Employment shrank at its fastest rate since the start of 2009 in the aftermath of the global crisis.

JAPANESE SPENDING DIPS: The government reported consumer spending fell 3.1 per cent in January from a year earlier following December's 4.4 per cent decline. That was despite a slight improvement in employment. "Today's figures suggest that private consumption continued to fall in Q1," said Marcel Thieliant of Capital Economics in a report.

ANALYST'S TAKE: "The economy's road to stability remains bumpy," said He Fan, Caijing magazine's chief economist, said of the manufacturing report Tuesday. "The government needs to press ahead with reforms, while adopting moderate stimulus policies and strengthening support of the economy in other ways to prevent it from falling off a cliff."

WALL STREET: Stocks fell, erasing nearly all the market's gains for the month, after health care stocks declined on weak earnings and lower natural gas prices pushed down energy shares. Investors lost enthusiasm for stocks after two straight weekly gains. The Dow Jones industrial average lost 123.47 points, or 0.7 per cent, to 16,516.50. The Standard & Poor's 500 index fell 15.82 points, or 0.8 per cent, to 1,932.23. That pushed the S&P 500 to its third monthly loss. The Nasdaq composite index retreated 32.52 points, or 0.7 per cent, to 4,557.95.

ENERGY: Benchmark U.S. crude added 38 cents to $34.13 in electronic trading on the New York Mercantile Exchange. The contract added 97 cents on Monday to close at $33.75. Brent crude, used to price international oils, rose 32 cents to $36.89 in London. It jumped $1.13 on Monday to $36.57.

CURRENCY: The dollar rose to 113.18 yen from Monday's 112.49 yen. The euro edged down to $1.0864 from $1.0880.


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