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Asian Stocks Stabilize

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Stocks up www.purnartha.comAsian stocks stabilized after the worst start to the year since 1988 as Chinas central bank added funds to the financial system and U.S. equities staged a late rally. The Peoples Bank of China conducted the biggest reverse-repurchase operations since September, adding 130 billion yuan ($20 billion) of funds to the financial system after money-market rates climbed to an eight-month high. The circuit breaker plays an important role in stabilizing the market, and the government will work to improve the system, China Securities Regulatory Commission spokesman Deng Ge said in a statement Tuesday.

According to Kinger Lau, Goldman Sachs China strategist, commonly cited explanations for the rout included weak mainland manufacturing data on Monday; further depreciation of the Chinese currency and its impact on capital outflows; concerns over near-term liquidity conditions, particularly the looming expiration of a sales ban by major shareholders and the resumption of initial public offerings; and concerns about policy stimulus inaction (or lower intensity) as the government begins to emphasise supply-side reforms.