Buildings in Pudong’s Lujiazui Financial District in Shanghai, China, on Monday, January 29, 2024.
Bloomberg | Bloomberg | Getty Images
Asia-Pacific markets rose on Tuesday, led by Chinese shares as Beijing announced a series of policy easing measures. in a rare press conference from central bank governor Pan Gongsheng.
PBOC will cut reserve requirement ratio banks by 50 basis points, although it did not give a specific timeline. It also announced it would cut the seven-day reverse repurchase rate to 1.5% from 1.7%.
Pan also said the government could cut the loan prime rate by 0.2 to 0.25 percentage points, without specifying whether he was referring to the one-year or five-year rate. The one-year LPR is currently at 3.35% and the five-year LPR is at 3.85%.
Other measures also include reducing down payments for second home purchases, as well as 1 trillion yuan ($141.78 billion) in long-term funds.
Winnie Wu, China strategist at Bank of America, described the move on CNBC “Asian Street Signs“as a “big bang that boosted investor confidence in the market.”
In the short term, they are positive on sectors such as banking and insurance, but Wu added that a recovery in domestic consumption will take longer to recover. She said more fiscal policy and structural reforms are needed to make a market recovery sustainable.
Hong Kong Hang Seng Index rose 2.35% at the open, while mainland China’s CSI 300 index rose 1%. Real estate stocks led gains on the CSI 300, while basic materials stocks were the biggest gainers on the HSI.
Australia’s central bank kept its benchmark policy rate unchanged at 4.35%, in line with expectations of economists polled by Reuters.
Last week, the Commonwealth Bank of Australia said in a note that economic data since its last meeting had “either been weaker than or in line with RBA expectations.” As a result, the CBA is expected to make a slightly less hawkish statement, but there is no significant change in wording or tone.
of Australia S&P/ASX 200 down 0.31%.
Japan Nikkei 225 up 1.37%, while the Topix gained 1% as Japan’s markets returned from a holiday. It was the first time the Nikkei has crossed the 38,000 mark since Sept. 3.
Korea Kospi unchanged, while the Kosdaq small-cap index rose 0.85%.
Overnight in the United States, Nasdaq Composite up 0.14%, also mirroring gains in two other major US indexes.
The S&P 500 And Dow Jones Industrial Average hit a new closing high in Monday’s trading session.
The broad market index rose 0.28% to end at 5,718.57, while Dow Jones Industrial Average increased 61.29 points, equivalent to 0.15%, closing at 42,124.65.
—CNBC’s Brian Evans and Alex Harring contributed to this report.
