China market slips 1.64%

Mainland China equity market closed down in volatile trade on Monday, 20 April 2015, as investors concern about steps by government to curb margin trading outweighed additional monetary easing in the world's second-largest economy. Shanghai Composite Index declined 70.22 points, or 1.64% to 4217.08 at the close, off an intraday peak of 4356. The CSI300 index, the largest listed companies in Shanghai and Shenzhen, slipped 74.22 points, or 1.61%, to 4521.92.

The People Bank of China has lowered the reserve requirement ratio (RRR) for all banks 100 basis points over the weekend. The wider than expected cut on Sunday was the China's central bank second reduction in two months as it steps up measures to boost bank lending and combat slowing growth. The reserve-ratio level will decline to 18.5 percent. An extra 1-percentage RRR cut was given to commercial banks for agricultural services and an additional reduction of 2 percentage points to the Agricultural Development Bank of China. The central bank also further lowered RRR by 0.5 percentage point for eligible banks that lend a certain amount of loans to agricultural borrowers or small and micro businesses.

 

The move to spur bank lending announced after authorities on late Friday tightened rules around buying stocks with borrowed money and bolstered short-selling. Chinese regulators said on Friday, after mainland markets closed, that they would allow fund managers to lend shares for short-selling and would also expand the number of stocks investors can short sell, in a bid to raise the supply of securities in the market.

Powered by Capital Market - Live News