Asian stocks down despite Chinese stimulus

<p>Trading sentiment was dampened by Chinese regulatory curbs on speculative trading.</p>

Asian stocks were down today (April 20th) as China implanted regulatory curbs on speculative trading.

On Friday, the China Securities Regulatory Commission banned the margin trading businesses of brokerages from taking part in umbrella trusts, which allow investors to take on more leverage, Bloomberg reports.

The move dampened investor's sentiment, even though China's central bank lowered the reserve requirement ratio (RRR) for all banks by one percentage point over the weekend in a bid to stimulate lending into the sluggish economy. 

Chinese newspaper People's Daily said the cut is expected to release 1.2 trillion yuan (£130 billion) into the country's economy. 

"The RRR cut attempted to put a calm on markets after Friday's news, but the magnitude of the cut was more than what the market priced in," Catherine Yeung, investment director at Fidelity Worldwide Investment, told CNBC Asia's "Squawk Box."

The Shanghai Composite tumbled 1.6 per cent to 4218.12 after rising about one per cent in early trading. Japan's Nikkei 225 lost 0.1 per cent at 19,634.49. Hong Kong's Hang Seng sank two per cent to 27094.93 while South Korea's Kospi added 0.2 per cent to 2,146.71.

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.