China stocks rise most in two weeks on fresh stimulus hopes

Credit: REUTERS/CHINA STRINGER NETWORK

SHANGHAI, Nov 19 (Reuters) - China stocks rose the most in two weeks on Tuesday, as a cut in a key interbank funding rate on Monday bolstered hopes for more government stimulus to prop up slowing growth.

** The blue-chip CSI300 index .CSI300 rose 1.0%, to 3,947.04, while the Shanghai Composite Index .SSEC gained 0.9%, to 2,933.99.

** The People's Bank of China unexpectedly trimmed a closely watched money market funding rate on Monday, the first such cut in more than four years and a signal to markets that policymakers are ready to act to prop up slowing growth.

** The seven-day reverse repurchase rate CN7DRRP=PBOC was cut to 2.50% from 2.55%.

** Ting Lu, chief China economist at Nomura International, said he expected a couple of small, 5-basis-point cuts in money market funding rates before mid-2020.

** "It's now very evident that Beijing has been stepping up efforts to stabilize growth as top leaders are increasingly concerned about the downward pressure on growth," Lu wrote.

** "I believe Beijing is to plan a bigger fiscal deficit and bigger amount of special bonds in 2020. Beijing might especially wish to boost infrastructure investment growth."

** Investors are awaiting clearer news on the progress of U.S.-China trade negotiations. Overnight, CNBC reported the mood in Beijing was pessimistic about the prospects of sealing an agreement. On the other hand, a new extension allowing U.S. companies to keep doing business with Chinese telecoms giant Huawei suggested something of an olive branch.

** The CSI300 financial sector sub-index .CSI300FS was higher by 0.34%, the consumer staples sector .CSI000912 up 0.92%, the real estate index .CSI000952 up 1.65% and the healthcare sub-index .CSI300HC up 2.1%.

** The smaller Shenzhen index .SZSC ended up 1.83% and the start-up board ChiNext Composite index .CNT was higher by 2.77%.

** Around the region, MSCI's Asia ex-Japan stock index .MIAPJ0000PUS was firmer by 0.51%, while Japan's Nikkei index .N225 closed down 0.53%.

** At 07:15 GMT, the yuan CNY=CFXS was quoted at 7.0248 per U.S. dollar, 0.01% firmer than the previous close of 7.0255.

** The largest percentage gainers in the main Shanghai Composite index were Jiangsu Zongyi Co Ltd 600770.SS, up 10.08%, followed by Jiangsu Lugang Culture Co Ltd 601599.SS, gaining 10.07%, and Panda Financial Holding Corp Ltd 600599.SS, up by 10.05%.

** The largest percentage losers in the Shanghai index were Zhejiang Shengda Bio-Pharm Co Ltd 603079.SS, down 7.14%, followed by Ribo Fashion Group Co Ltd 603196.SS, losing 4.94%, and Jiangxi Lianchuang Opto Electronic Science &Technology Co Ltd 600363.SS, down by 4.26%.

(Reporting by Shanghai Newsroom; Editing by Subhranshu Sahu)

((Samuel.shen@tr.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.