China Market rises 0.42%

Mainland China share market finished session firmly in positive territory on Tuesday, 20 February 2024, as risk sentients underpinned after a rate cut announcement by Beijing's central bank to prop up the struggling property market and broader economy.

Also helping sentiment, China's securities watchdog said it held a series of seminars with market participants who proposed tighter scrutiny of company listings and trading behaviour.

At close of trade, the benchmark Shanghai Composite index increased 0.42%, or 12.19 points, to 2,922.73. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.52%, or 8.29 points, to 1,612.46. The blue-chip CSI300 index surged 0.21%, or 7.04 points, to 3,410.85.

 

ECONOMIC NEWS: The People's Bank of China cut the five-year loan prime rate (LPR) by 25 basis points to 3.95%, in a bid to invigorate the nation's sluggish economy and struggling property sector. The five-year LPR is considered a peg for property mortgages. The PBOC left unchanged its LPR for one-year loans, at 3.45%.

CURRENCY NEWS: China's yuan closed steady against the dollar on Tuesday following China's larger than expected cut to a benchmark reference rate for mortgages to help revive the property market. The five-year loan prime rate (LPR) CNYLPR5Y=CFXS was lowered by 25 basis points to 3.95% from 4.20% previously. The one-year LPR CNYLPR1Y=CFXS was left unchanged at 3.45%. Prior to the market's opening, the People's Bank of China set the midpoint rate at 7.1068 per U.S. dollar, 0.05% weaker than the previous fix of 7.1032. In the spot market, the onshore yuan CNY=CFXS yuan was changing hands at 7.1982 at midday, only 5 pips firmer than the previous late session close.

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