Asia stocks rise after China central bank frees money for lending

Asian stock markets climbed on Monday after China moved to boost bank lending to shore up slowing economic growth .

Japan's Nikkei 225 index jumped 1.4 per cent to 9,512.28. Hong Kong's Hang Seng rose 1.1 per cent to 21,718.60 and China's Shanghai Composite Index was up 1 per cent at 2,380.15.

South Korea's Kospi added 0.4 per cent to 2,030.84. Australia's S&P/ASX 200 gained 1 per cent to 4,238.30. Benchmarks in Singapore, Taiwan, the Philippines and Indonesia also rose.

China's central bank said on the weekend it will lower the ratio of funds that banks must hold as reserves to 20.5 per cent from 21 per cent effective Friday. That will free up tens of billions of dollars for lending.

The cut frees money for lending at a time when the growth rate is expected to drop from last quarter's 8.9 per cent to closer to 8 per cent.

The cut is the second in two months. Regulators are moving cautiously, however, avoiding interest rate cuts and retaining lending controls imposed to cool an overheated housing market.

Market sentiment in Asia was also boosted by a strong showing on Wall Street on Friday.

The Dow Jones industrial average edged close to the 13,000 marker. The Dow hasn't closed above 13,000 since May 19, 2008, before the financial crisis.

The Dow rose 0.4 per cent to close at 12,949.87, its highest close for the year so far. The Standard & Poor's 500 rose 0.2 per cent to 1,361.23, also setting a record close for 2012. The Nasdaq composite fell 0.3 per cent to 2,951.78.

Markets in the US are closed on Monday for the Presidents' Day long weekend.

Later on Monday, traders will turn their attention to Greece, which is trying to secure rescue loans from other European countries so it won't default on debt due next month. The finance ministers of euro countries are meeting Monday to finalize the terms of a bailout deal.

Benchmark oil for March delivery was up $1.80 to $105.03 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 93 cents to finish at $103.24 per barrel on the Nymex on Friday.

In currency trading, the euro rose to $1.3211 from $1.3159 late Friday in New York. The dollar was nearly unchanged at 79.47 yen.