Asian stocks edged higher on Monday as China’s weekend interest rate cut partially offset soft U.S. data, while the dollar hit a five-week high against the euro. China on Saturday stepped up its easing tempo and cut its lending and deposit rates as the world’s second largest economy tries to ward off deflation.
Australian shares posted some of the biggest gains in Asia following the China rate cut, gaining 0.8 percent .AXJO after touching a seven-year peak as resource shares surged. But the impact from the weekend easing only had a limited effect on the region’s overall markets.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.1 percent. Tokyo’s Nikkei .N225 crawled up 0.3 percent and Chinese and South Korean stocks also posted comparable modest gains. Equity markets were also cautious after revised data on Friday showed U.S. gross domestic product expanded at a slower pace in the fourth quarter than initially thought, and the University of Michigan’s final February reading on U.S. consumer sentiment slipped from an 11-year high but topped expectations.