Asian shares up after China rate cut
Markets in Asia reacted with caution to China’s surprise interest rate cuts.
Shares in Asia rose today (October 26th) following an expected move from the People’s Bank of China, who announced late on Friday it was lowering the one-year benchmark bank lending rate by 25 basis points to 4.35 per cent, while the one-year deposit rate would fall to 1.5 per cent from 1.75 per cent.
The bank also removed the ceiling on deposit rates in a bid to boost competition between Chinese banks. The amount of money banks must hold in reserve was also cut by 50 basis points for all banks.
"The market was slightly buoyed by the central bank’s rate cut. Medium and small companies, and securities companies were relatively dynamic," Zhang Qi, an analyst at Haitong Securities in Shanghai, told The Guardian.
"But the market appeared to be in correction after it rose a lot in October, and some investors sold stocks on the short-lived rise from the rate cuts. So overall, the market stayed stable today," he added.
Tokyo's Nikkei 225 index gained 0.7 per cent to 18,963.53, China's Shanghai Composite Index rose 0.7 per cent to 3,437.58 and South Korea's Kospi edged up 0.1 per cent to 2,043.50. Hong Kong's Hang Seng was down 0.1 per cent to 23,125.94 and Australia's S&P/ASX 200 dipped 0.1 per cent to 5,348.00.
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