Asia: Indices on the up with hopes for China stimulus

As Chinese consumer price inflation cooled to a multi-year low, Asian indices were largely in positive territory on Wednesday morning, with moderate gains to be seen elsewhere in the region.

The lower consumer and still-falling producer price inflation readings suggested Beijing policymakers could announce more stimulus measures.

This comes ahead of economic growth data next week which is expected to show a further slowing of the domestic economy.

China's consumer price index climbed 1.6% in September from a year earlier, slowing from the 2% gain registered in the previous month and below the 2.1% gain seen over the first nine months of the year, according to the data released by the National Bureau of Statistics.

That was the slowest pace of rises since January 2010, cs a result of China's falling food prices and declining investment in infrastructure.

Beijing has set a target of keeping price increases at 3.5% or lower for the whole year.

The producer price index fell 1.8% in September, well below the 1.2% gain of August, as factory activity continued to remain stuck in a low gear.

Elsewhere, South Korea has held military talks with its northern neighbour for the first time in seven years.

The Bank of Korea also lowered its growth forecasts and lowered its main policy rate by 25 basis points, as expected; its second rate cut in three months after the previous 15-month rate freeze.

The central bank has not ruled out another rate cut to bolster a fragile economic recovery, as it lowered its growth and inflation expectations for 2014 and 2015.

In Tokyo, the volatile yen-dollar rate moved in the right direction for exporters, lifting stocks like Sony, Honda and Panasonic.

Morgan Stanley's strategy team reiterated their positive stance on Japanese equities.

Declining rubber prices are hitting Indonesian and Thai farmers.