Asia stocks up; China posts first gain in 10 sessions

Chinese stocks gained for the first time Monday in 10 trading sessions, indicating improving confidence among investors concerned that a spike in interbank lending rates last week could gum up the country's financial system.

The Shanghai Composite (CN:SHCOMP)  fell as much as 0.6% shortly after the open but recovered to close 0.2% higher for the day, as investors started to come to terms with stubbornly high interest rates that banks charge each other for short-term loans.

Reuters Enlarge Image A panel displaying world market indexes at the exhibition hall of the Hong Kong Stock Exchange.

Interbank rates fell as low as 5.57% early Monday, but hit 9.8% later in the day. The credit squeeze is happening despite a cash injection from the central bank last week of $49.4 billion and has raised concerns that China could be headed into another cash crunch of the kind that shook investors over the summer.

In Hong Kong, the Hang Seng Index (HK:HSI)  was up 0.5%, helped by China Mobile (HK:941)   (CHL)  which traded 0.8% higher after Apple (AAPL)  said it plans to start offering the iPhone on China Mobile's network from Jan. 17.

China Everbright Bank (HK:6818)  , which on Friday raised $3 billion in Hong Kong's biggest initial public offering this year, fell 0.5%, extending its lackluster performance in its debut on Friday. Investors have remained cautious over the level of bad debt at Chinese banks, particularly when interbank lending rates are high.

In regional markets, Thailand's SET (TH:SET)  lost 1.3%, and the baht  (USDTHB)  hit a 3.5-year low as the country's political clashes escalated further. Anti-government protests are still drawing crowds of around 150,000 people weeks after they first began. Over the weekend, opposition leaders said they would boycott a snap election called for Feb. 2.

MARKETS | Expanded markets coverage
• The Tell: Market news and analysis
• U.S. and Canada markets | Canada section
• Columns: Stocks | Oil | Gold | Bonds | Dollar

TOOLS AND DATA | Markets data menu
• My Portfolio: Know where your funds are?
• Real-time currency exchange rates
• After-hours stock screener
/conga/story/misc/markets.html 240610

Elsewhere, the mood was more upbeat. Positive signs from the U.S. helped lead Asia stocks higher. Also, the International Monetary Fund on Sunday raised its forecast for 2014 U.S. economic growth to 2.5%, up from the 1.6% it expects the country to achieve this year.

South Korea's Kospi (KR:SEU)  rose 0.7% at a two-week high. In South Korea, shares of Hyundai Securities (KR:003457) jumped 5.7% after parent Hyundai Group said Sunday that it will sell its financial businesses, including its securities division, to reduce debt and focus on other business areas, such as shipping. The company said the restructure would raise up to 3.3 trillion won ($3.1 billion).

Australia's S&P/ASX 200 (AU:XJO)  gained 0.5%. New Zealand's benchmark index was up 0.8%. Markets in Japan were closed for the Emperor's Birthday national holiday.

The yen (USDJPY)  was slightly stronger against the U.S. dollar, with one dollar buying ¥103.97 compared with ¥104.09 late Friday in New York.

More MarketWatch news

Netflix, other consumer stocks aim to end year on top

Gold's 13-year bull run breaks with 29% annual loss