Asian shares mostly gain as easy money policies support

Investing.com - China's shares rose Tuesday as investors continued to welcome easy money policies, and Tokyo, which reopened after a long weekend, made solid gains as it caught up with the rest of the region's rally yesterday.

The Nikkei 225 was up 0.4%, reacting to China's move to slash lending rates on Friday. Japan was closed Monday for a holiday, making today the first day the market had a chance to factor in China's surprise announcement.

More stimulus for China should mean a better growth outlook for the world's second-biggest economy, which in turn should benefit the rest of the world. It also follows a massive monetary stimulus at the end of October by the Bank of Japan, a move that has helped push the Nikkei up 6.1% this month.

Continued weakness in the Japanese yen has also been a boon to the country's exporters, who earn in dollars overseas and pay costs in yen at home.

But enthusiasm in the rest of Asia was cooling, just days after China cut borrowing costs for the first time in more than two years and after a knee-jerk rally across the region on Monday. The move may not do much to push Chinese banks to lower the cost of their loans, as the industry tries to maintain margins, say analysts.

Korea's Kospi was down 0.2% at 1975.83. Australia's S&P/ASX 200 was down 0.7% at 5323.50.

Overnight, U.S. stocks posted modest gains on Monday amid hopes a flurry of economic data due out this week, including gross domestic product, consumer confidence and home sales, will reflect an improving U.S. economy.

The Dow 30 rose 0.04%, the S&P 500 index rose 0.29%, while the Nasdaq Composite index rose 0.89%.

In a session void of major economic indicators, stocks rose on hopes Tuesday's U.S. GDP and consumer confidence reports and Wednesday's new and pending home sales data will reflect an economy that continues to recover from the 2008 financial crisis and will see added growth going forward.

U.S. stocks also applauded data out of Europe revealing that German business sentiment improved this month after six successive months of declines, indicating that the downturn the euro area’s largest economy and key market for U.S. companies may be ending.

Germany’s Ifo business climate index rose to 104.7 from 103.2 in October, confounding forecasts for a decline to 103.0.

The current conditions index rose to 110.0 from 108.4 last month and the expectations index improved to 99.7 from 98.3, both figures topping market forecasts.

On Tuesday, expect investors to track U.S. economic growth data as well as a U.S. consumer confidence report.