You are here: Home » News-CM » International » Market Report
Business Standard

China Market rises on marginal lending rate cut

Capital Market 

The Mainland China equity market closed higher on Friday, 20 September 2019, as risk sentiments underpinned after China's central bank narrowly cut a key benchmark lending rate in another tentative sign of monetary easing as the world's second-biggest economy grapples with a slowdown partly induced by a trade war with the US. At closing bell, the benchmark Shanghai Composite Index rose 0.24%, or 7.17 points, to 3,006.45. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.16%, or 2.72 points, to 1,675.35. The blue-chip CSI300 index rose 0.3%, or 11.27 points, to 3,935.65.

The People's Bank of China on Friday reduced its one-year Loan Prime Rate (LPRs) from 4.25% to 4.20%. China introduced the LPR as its main lending rate for businesses in August, in a move designed to make interest rates in the country more market-driven.

Bank lending was previously priced on a benchmark set daily by the central bank. The LPR rate is determined on the 20th day of every month. It only applies to newly issued loans. The five-year prime rate, generally used as a reference rate for new mortgage loans, was kept unchanged at 4.85%.

The largely-expected reduction in the one-year Loan Prime Rate (LPR), now at 4.20%, came after the People's Bank of China (PBOC) lowered banks' reserve requirements on Monday. It also comes shortly after the Federal Reserve cut U. S. interest rates by 25 basis points.

CURRENCY NEWS: China's yuan firmed to 7.0843 per dollar after a trim to a benchmark interest rate in China was smaller less dovish than some market players expected.

Powered by Capital Market - Live News

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, September 20 2019. 17:19 IST
RECOMMENDED FOR YOU
RECOMMENDED FOR YOU