Asia: Stocks recover from Monday's losses following China's decision to inject funds
Updated : 11:24
Asian stocks were higher on Tuesday, recovering from heavy losses on Monday over fears about Greece.
The Shanghai composite index jumped 5.53% and Hong Kong's Hang Seng gained 1.09% after China's central bank injected fresh funds into its financial system.
The People's Bank of China on Tuesday injected $5.6bn in fresh funds through open market transactions.
Furthermore, in a surprise move, China lowered its benchmark lending rate by 25 basis points to 4.85% and the one-year deposit rate by 25 basis points to 2%.
“There have been efforts as of late to cool the equity market in China after an astonishing 12 months in which the Shanghai Composite rallied more than 150%, which raised concerns that a painful correction will follow. The efforts have worked, unfortunately too well, which has forced the PBOC to step in and try and halt the freefall,” said Oanda analyst Craig Erlam.
Due to uncertain demand from China and concerns over Greece spreading to the wider continent, base metals continue to grapple. aluminium, lead and zinc were down 1.6%, 1.1% and 1% respectively.
The Nikkei 225 rose 0.63% following mixed macro data released overnight. According to the Japanese Ministry of Land, Infrastructure and Transport, housing starts rose 5.8% in May from 0.4% same time last year.
However, vehicle production fell 16.6% and construction orders continued to decline by 7.4%.
The Japanese multinational Sony fell 8.26% after announcing it needs to raise $4bn via new shares and bonds to finance production of image sensors for smartphones.
Elsewhere in Australia, the ASX index closed up 0.64% led by banking, retail and telecoms services stocks.
Retailer Kathmandu rose 25.9% after New Zeland's Briscoe Group announced it plans to takeover the Australian clothing and travel equipment business.
In economic data released by the Reserve Bank of Australia, private sector credit rose slightly by 6.2% year-on-year in May from 6.1%, but new home sales contracted 2.3% in May from an increase of 0.6% a month earlier.