ROME: Asian stocks were firm on Tuesday after China’s latest step to prop up its faltering economy lifted global equities, while the euro was pressured on growing worries a cash-strapped Greece may default on its debt.
MSCI’s broadest index of Asia-Pacific shares outside Japan was steady, with the dollar’s gains against some Asian currencies offsetting a rise in stock prices in local currency terms.
Japan’s Nikkei and South Korean shares each added 0.2 percent, while Australian shares rose 0.4 percent.
The Chinese central bank on Sunday cut the amount of cash banks must hold as reserves in its latest attempt to spur lending and combat a slowing economy. The news followed reports last week about a crackdown on margin lending there, which had sent global equity markets lower on Friday.
“China’s action undid the damage caused by the crackdown (on speculative buying in Chinese stocks on Friday),” said Hirokazu Kabeya, chief global strategist at Daiwa Securities.
“Chinese authorities seem to be worried that the stock markets are rallying despite weak economic fundamentals… There could be more stimulus down the road.”
The China stimulus news helped to life European and US shares on Monday. The S&P 500 index rose 0.9 percent.
However, many investors are likely to be cautious about chasing shares higher ahead of corporate earnings and the continued uncertainty over Greece.
Mounting worries that Greece could default on its debt payment are hurting the euro.
