Buildings in the Lujiazui financial district in Pudong, Shanghai, China, Monday, January 29, 2024.
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Asia-Pacific stocks rise, led by Chinese stocks as Beijing announces slew of easing policies in a rare briefing Pan Gongsheng, President of the Central Bank, delivered a speech.
The People’s Bank of China will lower bank deposit reserve ratios by 50 basis points, but did not provide a specific timetable. It also announced a reduction in the seven-day reverse repo rate from 1.7% to 1.5%.
Pan also said authorities could lower the prime loan interest rate by 0.2 to 0.25 percentage points, but did not specify whether he was referring to one-year or five-year terms. The current one-year LPR is 3.35% and the five-year LPR is 3.85%.
Other measures include reducing down payments for second homes and 1 trillion yuan ($141.78 billion) in long-term funding.
Winnie Wu, China strategist at Bank of America, described the move as “a big bang that increased investor confidence in the market” on CNBC’s “Street Signs Asia.”
In the short term, they are bullish on sectors such as banking and insurance, but Wu added that domestic consumption recovery will take longer to recover. She said fiscal policy and structural reforms need to be strengthened to make the market rebound sustainable.
Hong Kong Hang Seng Index It opened up 2.35%, with the CSI 300 Index rising 1%. Real estate stocks led the gains in the CSI 300 Index, while basic materials stocks led the gains in the Hang Seng Index.
The Reserve Bank of Australia will also announce an interest rate decision on Tuesday. Economists polled by Reuters expect the Reserve Bank of Australia to maintain interest rates at 4.35%.
The Commonwealth Bank of Australia said in a note last week that economic data since the last meeting had “either been weaker or in line with the RBA’s expectations”. As a result, CBA expects the statement to be slightly less hawkish, but without a significant change in language or tone.
Australia’s S&P/ASX 200 index was trading slightly closer to its flat line ahead of the RBA’s decision.
Japanese Nikkei 225 Index rose 1.37%, while the Topix gained 1% as Japan’s market holiday ended. This marks the first time since September 3 that the Nikkei has exceeded the 38,000-point mark.
Korean Cospi was flat, while the small-cap Kosdaq index rose 0.85%.
The U.S. Nasdaq rose 0.14% overnight, mirroring gains in the other two major U.S. stock indexes.
this S&P 500 Index The Dow Jones Industrial Average hit a new closing high during Monday’s trading session.
The broader market index rose 0.28% to close at 5,718.57 points; the Dow Jones Industrial Average rose 61.29 points, or 0.15%, to close at 42,124.65 points.
—CNBC’s Brian Evans and Alex Harring contributed to this report.
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