Mainland Chinese stocks rise as China keeps lending prime rate unchanged

Mainland Chinese stocks surged on Monday, as China maintained its policy rate for the third month in a row.

the Shanghai Composite jumped 3.11% to close at 3,314.15 while the Shenzhen Composite Index rose 2.68% to close at 2,216.70. The Shenzhen component jumped 2.55% to 13,448.85.

Over the weekend, Chinese regulators raised the limit on the amount insurers can invest in equity assets to 45%, according to Reuters, in a bid to bring more long-term funds to the market.

China has kept its one-year and five-year preferential rates unchanged, according to Reuters, as its economy continued to recover after it reopened in the wake of the coronavirus crisis. Last week, official data showed its economy grew 3.2% in the second quarter from a year earlier, better than the 2.5% expected by analysts, according to Reuters.

In Hong Kong, the Hang Seng Index lost 0.38% in the afternoon. The city has tightened the restrictions again after that reported cases increased to over 100 in 24 hours over the weekend. Hong Kong leader Carrie Lam said the situation was “very serious and there was no sign of it being under control,” according to Reuters.

from Japan Nikkei 225 recovered from earlier losses to rise 0.09%, closing at 22,717.48. The Topix rose 0.20% to close at 1,577.03.

Japanese exports plunged 26.2% in June from a year earlier, according to Reuters data. It was a worse-than-expected drop, as economists in a Reuters poll had predicted a drop of 24.9%. Imports fell 14.4%, against expectations of a 16.8% drop, according to Reuters.

In May, Japan’s exports fell 28.3%, the fastest pace since the global financial crisis when car shipments to the United States plunged, according to Reuters.

The automobile industry, a big export sector for Japan, has been on the decline all day. At the close, Nissan had plunged to 3%, Mitsubishi engine tumbled 1.77% and Suzuki fell 3.64%.

Australia’S & P / ASX 200 lost 0.54% to close at 6,001.60 as financials saw declines across the board. In South Korea, the Kospi slipped 0.14% to close at 2,198.20.

Overall, The largest MSCI index of Asia-Pacific equities excluding Japan edged down 0.09%.

Currencies and oil

the US dollar index, which tracks the greenback against a basket of its peers, was at 95.876, losing ground from levels above 96 earlier.

the Japanese yen was trading at 107.25 to the dollar, after a turbulent previous week where it was trading at levels between 106 and 107. the Australian dollar briefly touched the 0.70 level in the morning, before falling back to 0.6983.

Oil prices deepened their declines in the afternoon of Asian trading hours. International benchmark Brent Crude Futures fell 1.07% to $ 42.69 a barrel. U.S. crude futures contracts also fell 1.03% to $ 40.17 a barrel.

What’s available (all times in HK / SIN):

  • 4:30 p.m .: Hong Kong unemployment rate for June
  • Earnings: Australia South32

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