China Market surges on PBOC easing signals

The China share market finished session sharp higher on Monday, 17 August 2020, as sentiments boosted up on bets monetary policy will remain loose after the People's Bank of China added 700 billion yuan ($101 billion) of one-year funding via the medium-term lending facility in new stimulus measures to help the economy recover from the coronavirus pandemic.

At closing bell, the benchmark Shanghai Composite Index was up 2.34%, or 78.70 points, to 3,438.80. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 1.92%, or 43.17 points, to 2,287.34. The blue-chip CSI300 index fell added 2.35%, or 110.60 points, to 4,815.23.

The People's Bank of China added 700 billion yuan ($101 billion) of one-year funding through a medium-term lending facility to financial institutions steady at 2.95% from previous operations, signifying that it is willing to loosen monetary policy to combat the economic fall out of the coronavirus pandemic. The fresh fund injection well exceeds two batches of MLF loans that are set to expire in August, with a total volume of 550 billion yuan. The MLF, one of the PBOC's main tools in managing longer-term liquidity in the banking system, serves as a guide for the LPR, which is set monthly using assessments from 18 banks.

Stocks related to the banking sector led the gains, with China Merchants Securities Co. and China Life Insurance Co. both jumping by the 10% daily limit.

Meanwhile, five IPOs started trading on the mainland markets. In Shanghai, GSP Automotive Group Wenzhou rose 44% to 22.42 yuan from its listing price of 15.57 yuan. Bonree Data Technology shot up 84% to 121.11 yuan from its listing price of 65.82 yuan. Shanghai CEO Environmental Protection surged 40.9% to 65.12 yuan from its listing price of 46.22 yuan. InfoVision Optoelectronics Kunshan surged 707.4% to 9.85 yuan from its listing price of 1.22 yuan. In Shenzhen, Dongguan Aohai Technology gained 44% to 38.71 yuan from its listing price of 26.88 yuan.

Powered by Capital Market - Live News