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China Market surges on PBOC RRR cuts

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Capital Market
Last Updated : Jul 12 2021 | 8:16 PM IST
The Mainland China share market finished session higher on Monday, 12 July 2021, as central bank's surprise policy easing to support the economy boosted risk appetite among Chinese investors, outweighing concerns about Washington's new sanctions.

At closing bell, the benchmark Shanghai Composite Index was up 0.67%, or 23.75 points, to 3,547.84. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 1.98%, or 48.30 points, to 2,485.15. The blue-chip CSI300 index added 1.25%, or 63.27 points, to 5,132.71.

Late on Friday, the People's Bank of China (PBOC) delivered a universal 50-basis point reserve requirement ratio (RRR) cut on Friday, releasing around 1 trillion yuan ($154.19 billion) in long-term liquidity to underpin its post-COVID economic recovery that is starting to lose momentum. The larger than expected universal RRR cut is likely to reinforce market expectation that PBoC is determined to keep liquidity stable.

Meanwhile, markets showed little reaction to the Biden administration's decision on Friday to add 14 Chinese companies and other entities to its economic blacklist over alleged human rights abuses and high-tech surveillance in Xinjiang.

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First Published: Jul 12 2021 | 6:03 PM IST

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