Chinese shares gains after more stimulus from PBoC

Asian stocks were muted on Wednesday, even as Chinese and Hong Kong markets posted strong gains to extend the previous session's rally after China's central bank slashed its medium-term lending facility from 2.3 percent to 2.0 percent, marking the largest reduction of interest rates for one-year loans to financial institutions in history.

The dollar hit a new one-month low versus the euro and a 2 1/2-year trough to sterling as weak U.S. data bolstered the case for deeper rate cuts.

Gold held near record levels amid increased bets for another super-sized interest rate cut at the Federal Reserve's November meeting.

 

Crude oil retreated from a multi-week high despite industry data pointing to larger-than-expected crude draw.

China's Shanghai Composite index surged 1.16 percent to 2,896.31, extending its stimulus-fueled rally to a second day running. Hong Kong's Hang Seng index rose 0.68 percent to 19,129.10.

China's yuan hit a fresh 16-month high, briefly crossing the key 7-per-dollar level in offshore trading, following interest-rate cuts and new measures from the country's central bank.

China's central bank lowered the rate on medium-term lending facility on Wednesday after unleashing an aggressive monetary easing package on Tuesday.

The interest rate on medium-term lending facility was reduced to 2.0 percent from 2.3 percent, the People's Bank of China said in a statement. The last reduction was in July.

The PBoC conducted a CNY 300 billion MLF to maintain reasonable and ample liquidity in the banking system. The outstanding balance of the MLF was CNY 6.878 trillion.

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