Asian investors welcome Chinese interest rate cut

<p>Asian markets opened strongly on Monday following China’s decision to cut its interest rate.</p>

China's decision to cut its interest rate has sparked a surge in Asian shares as investors welcomed the move.

The People's Bank of China announced on Friday (November 21st) that its one year deposit rate would be cut from three per cent to 2.75 per cent in a bid to revive its economy.

This move has spread confidence around the markets and, combined with European Central Bank president Mario Draghi stating he would "step up pressure" to stimulate eurozone economy, it has reinvigorated investors.

Asian markets closed strongly on the back of the news with the Hang Seng and Shanghai Composite making gains of two per cent and 1.85 per cent respectively.

The positive feeling was felt in Australia as well where the S&P/ASX 200 index closed up 57.60 points (1.1 per cent) at 5,361.8. It represented the index's biggest percentage gain since October 22nd.

Learn about the Asian markets and CFD trading at City Index.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.