At close of trade, the benchmark Shanghai Composite Index advanced 0.88%, or 31.52 points, to 3,625.13. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 1.05%, or 25.91 points, to 2,504.33. The blue-chip CSI300 index advanced 0.68%, or 33.07 points, to 4,913.49.
China's central bank cut its benchmark lending rate on Monday for the first time in nearly two years to prop up the slowing economy, in a sharp contrast to the United States and other major economies that are moving to tackle inflation.
The central bank cut the one-year loan prime rate, which is widely used as a benchmark for the loans banks make to their customers, from 3.85% to 3.8%. Monday's rate cut was the first since April 2020. The People's Bank of China this month cut the reserve requirement ratio, a rate for banks, in effect pumping close to $200 billion into the financial system.
The latest rate reduction underscored that the government of President Xi Jinping is trying to prevent an economic downturn against the backdrop of an electricity shortfall, financial market turmoil and another wave of COVID-19 infections.
Meanwhile, Beijing seeks to prevent a contagion from financial woes at China Evergrande Group and several other heavily indebted developers. China is urging large private and state-owned property companies to acquire real estate projects from troubled developers
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Most of sectors advanced, with shares in property developers being notable gainers amid growing signs of policy easing while tourism-related companies rebounded as fears over the Omicron COVID-19 variant eased.
CURRENCY NEWS: China's yuan was up against the U.S. dollar on Tuesday after firmer mid-point fixing by the central bank. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.3729 per dollar, 0.32% firmer, than the previous fix of 6.3933. In the spot market, the onshore yuan CNY=CFXS was changing hands at 6.3744 per dollar, 0.02% stronger from the previous late session close.
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