World Shares Advance on China Actions  05/20 04:57

   World shares rallied Tuesday after China cut key interest rates to help fend 
off an economic malaise worsened by trade friction with Washington.

   (AP) -- World shares rallied Tuesday after China cut key interest rates to 
help fend off an economic malaise worsened by trade friction with Washington.

   Shares in China's CATL, the world's largest maker of electric batteries, 
jumped 16.4% in its Hong Kong trading debut after it raised about $4.6 billion 
in the world's largest IPO this year. Its shares traded in Shenzhen, mainland 
China's smaller share market after Shanghai, gained 1.2% after dipping earlier 
in the day.

   The Reserve Bank of Australia reduced its benchmark interest rate by a 
quarter percentage for a second time this year, to 3.85%, judging inflation to 
be within its target range. The earlier reduction, in February, was Australia's 
first rate cut since October 2020.

   The future for the S&P 500 lost 0.3% while that for the Dow Jones Industrial 
Average was 0.1% lower.

   In European trading, Germany's DAX edged 0.2% higher to 23,988.93, while the 
CAC 40 in Paris climbed 0.1% to 7,892.94. Britain's FTSE 100 rose 0.5% to 
8,745.62.

   China's central bank made its first cut to its loan prime rates in seven 
months in a move welcomed by investors eager for more stimulus as the world's 
second largest economy feels the pinch of Trump's higher tariffs.

   The People's Bank of China cut the one-year loan prime rate, the reference 
rate for pricing all new loans and outstanding floating rate loans, to 3.00% 
from 3.1%. It cut the 5-year loan prime rate to 3.5% from 3.6%.

   With China's chief concern being deflation due to slack demand rather than 
inflation, economists have been expecting such a move. Data reported Monday 
showed the economy under pressure from Trump's trade war, with retail sales and 
factory output slowing and property investment continuing to fall.

   Tuesday's cuts probably won't be the last this year, Zichun Huang of Capital 
Economics said in a report.

   "But modest rate cuts alone are unlikely to meaningfully boost loan demand 
or wider economic activity," Huang said.

   Hong Kong's Hang Seng gained 1.5% to 23,681.48, while the Shanghai Composite 
index advanced 0.4% to 3,380.48.

   In Tokyo, the Nikkei 225 inched up 0.1% to 37,529.49, while Australia's 
S&P/ASX 200 rose 0.6% to 8,343.30.

   South Korea's Kospi lost 0.1% to 2,601.80, while the Taiex in Taiwan was 
nearly unchanged.

   India's Sensex lost 0.8%.

   On Monday, U.S. stocks, bonds and the value of the U.S. dollar drifted 
through a quiet day after Moody's Ratings became the last of the three major 
credit-rating agencies to say the U.S. federal government no longer deserves a 
top-tier "Aaa" rating.

   The S&P 500 picked up 0.1% and the Dow industrials added 0.3%. The Nasdaq 
composite was nearly unchanged.

   The downgrade by Moody's coincided with a debate in Washington over 
potential cuts in tax rates that could siphon away more revenue.

   If the government has to pay more in interest to borrow cash, that could 
cause interest rates to rise for U.S. households and businesses, too, in turn 
slowing the economy.

   The downgrade adds to a long list of concerns on investors' minds, chief 
among them President Donald Trump's trade war. It has forced investors globally 
to question whether the U.S. bond market and the U.S. dollar still deserve 
their reputations as some of the safest places to park cash during a crisis.

   The U.S. economy has held up so far and hopes are high that Trump will 
eventually relent on his tariffs after striking trade deals with other 
countries.

   But big companies have been warning about uncertainty over the future. 
Walmart, for example, said recently that it will likely have to raise prices 
because of tariffs. That caused Trump over the weekend to criticize Walmart and 
demand it and China "eat the tariffs."

   Walmart's stock slipped 0.1% Monday.

   In other trading early Tuesday, U.S. benchmark crude oil lost 4 cents to 
$62.10 per barrel. Brent crude, the international standard, shed 11 cents to 
$65.43 per barrel.

   The U.S. dollar fell to 144.44 Japanese yen from 144.86 yen. The euro 
climbed to $1.1261 from $1.1244.