Asian equities gained on Monday after Premier Wen Jiabao’s statement that China will take further steps to support growth in the world’s second-largest economy.
The MSCI Asia Pacific Excluding Japan Index added 0.3% to 404 as of 10:47 a.m. in Hong Kong. Hong Kong’s Hang Seng Index rose 0.1%, while China’s Shanghai Composite Index retreated 0.8%. Australia’s SP/ASX 200 Index advanced 0.8%, while New Zealand’s NZX 50 Index fell 0.5%. South Korea’s Kospi Index rose 0.1%.
Japanese markets were closed on Monday for a public holiday.
Shares advanced after Premier Wen warned the momentum for a recovery in Chinese economic growth is not yet in place and that “difficulties” may persist for a while, the official Xinhua News Agency reported yesterday. The government will increase measures in the second half of this year to support growth, he said.
In a separate report, Vice Premier Li Keqiang said that China needs to expand consumption and restructure the economy. The reports come after China’s gross domestic product increased 7.6% in the second quarter from a year earlier, the slowest pace in three years.
However, gains in equities were limited due to concern about declining profits for Asian companies.
Belle International Holdings Ltd., a women’s shoe retailer, added 2.2% in Hong Kong. Whitehaven Coal Ltd. soared 16% after Australian mining magnate Nathan Tinkler offered to buy out the rest of the coal producer.
Daekyung Machinery Engineering Co. declined 5.1% in Seoul after a shipmaker abandoned its bid for the chemical machinery maker. ZTE Corp., a Chinese telecommunications equipment maker, plunged 15% after saying first-half profit may plunge 80%.
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