Asia-Pacific stocks mixed; China keeps benchmark lending rate unchanged

SINGAPORE — Shares in Asia-Pacific were mixed in Wednesday morning trade as China defied expectations by keeping its benchmark lending rate unchanged.

The Shanghai composite in mainland China fell 0.26% in morning trade while the Shenzhen component shed 0.528%. Hong Kong’s Hang Seng index, which fell more than 2% on Tuesday, gained 0.36%.

China on Wednesday kept its one-year loan prime rate unchanged at 3.7%, while also holding steady on the five-year LPR at 4.6%. A majority of the traders and analysts surveyed in a snap Reuters poll expected a cut in the loan prime rate this month.

Investors have been watching for signs of policy support from Chinese authorities as the mainland continues to grapple with its worst Covid outbreak since the initial shock of the pandemic in 2020.

“I really don’t expect, you know, they’re very keen to put on the rate cuts … in the near term,” said Eva Lee, head of greater China equities at UBS Global Wealth Management’s chief investment office.

China’s second-quarter growth rate is set to be weak, but authorities are likely to make moves toward ensuring sufficient liquidity in the system rather than flooding it, Lee told CNBC’s “Street Signs Asia” on Wednesday.

The Nikkei 225 climbed 0.47% as shares of conglomerate SoftBank Group rose around 1%. The Topix index advanced 0.73%.

Australian stocks also traded in positive territory as the S&P/ASX 200 gained 0.51%. South Korea’s Kospi shed 0.37%.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.12% higher.

Overnight stateside, the S&P 500 climbed around 1.61% to 4,462.21. The Dow Jones Industrial Average gained 499.51 points, or 1.45%, to 34,911.20 while the Nasdaq Composite surged 2.15% to 13,619.66.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 100.903 — higher as compared with levels around 100.5 seen earlier in the week.

The Japanese yen traded at 129.17 per dollar, continue to weaken after going above 128 against the greenback yesterday. The Australian dollar changed hands at $0.7385, still lower as compared to levels above $0.745 seen last week.

Oil prices were mixed in the morning of Asia trading hours, with international benchmark Brent crude futures 0.21% lower at $107.02 per barrel. U.S. crude futures gained 0.58% to $103.15 per barrel.