Mainland China’s stock market, open for the first time since the weeklong Lunar New Year holiday, slipped on Monday, while markets elsewhere in the region rallied as investors digested the impact of recent moves by the U.S. and Chinese central banks.

The Shanghai Composite Index slid in and out of positive territory to eventually end down 0.5 percent, defying fears of a more dramatic decline after the Chinese central bank scaled back lending by state-owned banks right before the Lunar New Year holiday.

The timing of that announcement — it was the second time in a month that the People’s Bank of China raised the so- called reserve requirement ratio for banks — surprised many analysts. But it was widely interpreted as a continuation of Beijing’s efforts to rein in inflation.

Previous tightening moves by the authorities have made investors jumpy, but the effect was limited on Monday.

Among the losers on Monday were Industrial and Commercial Bank of China, which slipped 0.6 percent in Shanghai, and Bank of Communications, which sagged 1.6 percent.

Many analysts caution that further tightening moves, as well as global nervousness over the precarious state of Greece’s finances, are likely to keep stock markets volatile in coming weeks.

“The fine-tuning of monetary policy to curb asset and consumer price inflation has imparted volatility to financial markets since August 2009,” analysts at ING wrote in a note on Monday. “We expect this state of affairs to continue.”

Elsewhere in the region, stock markets rallied as investors digested the implications of the U.S. Federal Reserve’s decision late on Thursday to raise the rate on loans made directly to banks.

That move, seen as a small step toward exiting the emergency stimulus measures implemented during the financial crisis, had shaken markets across the Asia-Pacific region on Friday, but investors in Europe and the United States later took a more positive view late on Friday. The main markets in Europe reversed early losses to end higher on Friday, and opened slightly higher on Monday.

On Monday, the Nikkei 225 index in Japan closed 2.7 percent higher at 10,400.5 points, reversing a 2.1 percent tumble on Friday. Shares in Toyota, which have slumped this year amid a massive vehicle recall at the car maker, gained 1.2 percent.

Japan’s market is due to see a major new listing on April 1: Dai-ichi Mutual Life Insurance, a leading life insurer, announced on Monday that it would sell about $11.7 billion worth of shares in what will be the country’s largest market debut in years.

The main market gauges in Hong Kong and South Korea rallied 2.1 percent and 2.4 percent, respectively.

The Straits Times index in Singapore edged up 0.3 percent, the S.&P./ASX 200 in Australia rose 1.8 percent and the benchmark Sensex index in India gained 1 percent during the morning.

The Taiex index in Taiwan, which was also closed all last week for the Lunar New Year holiday, finished the day with a 1.6 percent gain.

Data published Monday showed the country’s economy roared ahead during the last quarter of 2009 thanks to recovering demand for its exports, from China in particular. The island’s economy expanded 9.2 percent from a year earlier, easily beating analyst expectations.


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