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Asian markets mixed after China’s pledge of economic support


BEIJING (AP) — Asian stock markets were mixed on Tuesday after China promised to speed up the rollout of policy changes to spur sluggish economic growth.

Shanghai gained while Hong Kong fell. Tokyo and South Korea were unchanged at midday.

China’s Cabinet Planning Agency on Monday promised to accelerate easier loans and other policies, but announced no new spending. Economic growth fell to 2.5% year on year in the second half, less than half of the official annual target.

The announcement could “bring a short-term improvement” to sentiment, but investors “ultimately want to see a stronger recovery,” IG’s Yeap Jun Rong said in a statement.

The Shanghai Composite Index gained 1% to 3,232.24 while the Nikkei 225 in Tokyo was unchanged at 28,618.62. The Hang Seng in Hong Kong fell 0.2% to 19,188.25.

Seoul’s Kospi was unchanged at 2,403.90 and Sydney’s S&P-ASX 200 gained less than 0.1% to 6,855.50. New Zealand fell while Southeast Asian markets gained.

US markets were closed Monday for Labor Day.

European markets plunged after Russian gas giant Gazprom announced on Friday that a suspension of supplies through the Nord Stream 1 gas pipeline would be extended indefinitely. This adds to shortages in Germany and other economies.

Deputy director of China’s National Development and Reform Commission Yang Yinkai said the agency will “speed up the release of policy effectiveness” to “compensate for losses caused by the epidemic in the second quarter,” according to dispatches.

The government cut interest rates, gave contractors a break on rents and promised other aid to revive the economy after Shanghai and other industrial hubs temporarily shut down to fight virus outbreaks. But he is avoiding big spending, perhaps for fear of reigniting rising housing costs and debt that Chinese leaders fear is dangerously high.

Also on Monday, Beijing freed up more foreign currency reserves of Chinese commercial banks for lending and trading by lowering the amount they must hold in reserve. The move reverses a hike imposed last year to curb speculative trading and curb a rise in the Chinese yuan’s exchange rate, which has since fallen.

In energy markets, benchmark U.S. crude gained $1.71 to $88.58 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, fell 81 cents to $94.93 a barrel in London.

The dollar rose to 140.48 yen from 140.46 yen on Monday. The euro gained 99.49 cents against 99.31 cents.