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Chinese stocks rose at the end of trading on Tuesday, supported by the central bank’s announcement of a package of measures to ease monetary policy and support the struggling property sector, which boosted investors’ hopes for the prospects of economic recovery after its weakness in the post-pandemic era..
The index recorded CSI 300 China had its best day in more than 4 years after Beijing announced a series of monetary easing measures at a rare news conference by central bank governor Pan Junsheng..
The index rose 4.33%, achieving its best day since July 2020, to close at 3,351.9 points, while the Hang Seng Index in Hong Kong rose about 4% after the decision, and is also on track for its best day in more than 7 months after the People’s Bank of China’s briefing..
The People’s Bank of China will cut banks’ reserve requirement ratios by 50 basis points, though it did not provide a specific timetable. It also said it would cut the seven-day reverse repo rate to 1.5% from 1.7%. Pan also said authorities could cut the benchmark lending rate by 0.2 to 0.25 percentage points, without specifying whether it was for one year or five years. The one-year mortgage rate is currently 3.35% and the five-year mortgage rate is 3.85%. Other measures include lowering down payments on second homes and adding 1 trillion yuan ($141.78 billion) in long-term funds..
On another note, Chinese auto stocks rose, unaffected by the US administration’s proposals to ban vehicles containing Chinese and Russian-made software or hardware..
Shenzhen-listed BYD ended the session up 1.72% to 254.29 yuan, while Hong Kong-listed Li Auto, Geely and Leap Motor rose 10.93%, 3.93% and 6.1% respectively..
In terms of the exchange rate, the US currency fell against its Chinese counterpart in the spot market by 0.19% to 7.0386 yuan during trading..
