Asia stocks drop as China injects cash into economy

BEIJING— Asian stocks declined Monday after China injected extra money into its cooling economy.

KEEPING SCORE: The Shanghai Composite Index tumbled 2.8 percent to 2,741.63 and Sydney’s S&P-ASX 200 lost 1.4 percent to 6,100.30. Hong Kong’s Hang Seng retreated 0.8 percent to 26,350.36 and Seoul’s Kospi shed 0.3 percent to 2,260.75. India’s Sensex advanced 0.4 percent to 34,530.90 while Japanese markets were closed for a holiday.

Benchmarks in Manila and Jakarta gained while New Zealand, Taiwan and Singapore retreated.

WALL STREET: Prices fell amid uncertainty about U.S. interest rates. Federal Reserve chairman Jerome Powell’s comment that interest rates are a “long way” from holding back economic growth prompted speculation the Fed will raise rates further. The Standard & Poor’s Index lost 0.6 percent to 2,885.57.

The Dow Jones Industrial Average dipped 0.7 percent to 26,447.05. The Nasdaq composite skidded 1.2 percent to 7,788.45. The yield on the 10-year Treasury note jumped to 3.23 percent, its highest since May 2011, from 3.19 percent.

CHINA RATE CUT: Beijing injected money into its cooling economy by reducing bank reserve levels. Economists say the change would free up some 1.2 trillion yuan ($175 billion) for additional lending. The central bank told banks to lend more to entrepreneurs. Chinese leaders are trying to shore up economic growth that began to cool after Beijing tightened lending controls last year to rein in a debt boom. A tariff fight with U.S. President Donald Trump has added to downward pressure on growth.

ANALYST’S TAKE: “The markets remain incredibly fragile,” said Stephen Innes of currency trader OANDA in a report. “The negative equities view” applies across the board, driven by “the toxic combination of higher U.S. yields and risk aversion,” he said. A boost to sentiment from China’s reserve ratio cut “has given way to the reality check” of higher U.S. Treasury yields.

ENERGY: Benchmark U.S. crude tumbled 54 cents to $73.80 per barrel in electronic trading on the New York Mercantile Exchange. The contract shed 1 cent to $74.34 on Friday. Brent crude, used to price international oils, dropped 80 cents to $83.36. It lost 42 cents the previous session to $84.16.

CURRENCY: The dollar gained to 113.79 yen from Friday’s 113.71 yen. The euro declined to $1.1505 from $1.1523.

ASSOCIATED PRESS Beijing injected money into its cooling economy by reducing bank reserve levels. Economists say the change would free up some 1.2 trillion yuan ($175 billion) for additional lending.