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Chinese Stocks Rise To 2 Month High Following PBOC's Rate, RRR Cut But Copper, Crude Struggle
As largely expected, following Friday's unexpected rate cut by the PBOC (which may have been mostly driven by 5th CCP Plenum considerations), and today's drop in the onshore Yuan which traded down 0.13% vs the Dollar to 6.3554, China's stocks opened solidly in the green, led by construction names, with recently troubled Vanke shares jumping 7.4% in early trading, the most since July 10, to their highest level since Aug. 11. Peers such as Longfor, CR Land and China Overseas Land, also jumped by 6.9%, 1.9% and 1.4%, respectively.
China's indices were solidly green in early trading, with the Shanghai Composite +0.9%, Shenzhen Comp +0.8%, and CSI 300 +1.3%.
Hong Kong was likewise euphoric, with several key names standing out:
- Tencent +1.3%; biggest contribution to HSI’s gains
- Banks such as Agricultural Bank +0.6%, ICBC +0.8%, and Bank of China +0.8% were all stronger after China removed the deposit rate ceiling
- Citic Securities +2.3%; seeks bond payment from Baoding Tianwei
- China Reinsurance +2.2% on its debut
Elsewhere in the Asian region, early sentiment was also a broad, if somewhat tame, bullishness.
- MSCI AP Index +0.7% to 136.71; health care, consumer discretionary rise most
- Nikkei 225 +1.2%; Topix +1.1%; yen +0.3% to 121.17/USD
- Hang Seng Index +0.7%, HSCI +0.7%, HSCEI +1.1%
- Shanghai Composite +0.9%,
- ASX 200 +0.2%
- Kospi +0.3%
- Straits Times Index +1.0%
- KLCI -0.2%
- TWSE +0.7%
- Philippines Composite +1.6%
- Australian dollar +0.4% to $0.7242
- NZ dollar +0.1% to $0.6760
- Dollar Index -0.1% to 96.98
- Asia dollar index +0.1% to 108.57
As for China's key index, the Shanghai Composite, it is up over 1%, or 40 points in early trading, to 3,450 - the highest level in 2 months, a gain which however is well below Friday's pre-rate cut gain...
... and if prior rate cut history is any indication, not to mention the weak reaction by commodities on Friday (continuing into today, where WTI turned green by the smallest of margins just seconds ago...
... not to mention copper which is down for the second day in a row...
... we would not be surprised to see China's stocks sliding back into the red very shortly as "sell the news" concerns return, and as the increasingly more addicted "markets" demand even more liquidity from central banks just to stay unchanged, let alone rise to new all time highs.
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Hopium Maximus
I believe crapula is Latin for hangover, God's gift to bankers on a 2 month high
I think Brent[not WTI] is going under $40.00 soon.
This contango situation is getting closed. I think WTI is headed into the $30s after the fall in Brent.
If water is any indicator, and based on fuel prices, we're just making things worse.
Airline travel is horrible, yet prices ramain high. Reminds me of the 70's de-regulation.
Cutting production won't stop the effect. Prices need to be dropped, but if rates rise, corporate debt payments can't be serviced.
Stock Market Kaa Boom!
Yuan mei king lo sa mo ni? Yu bai ka pa. Lo sa lo sa ka pa!
They wants the fiats. They learned to love big brother.
nothing is keeping the markets up; and commodities are sliding....how long before Glencore implodes, taking the whole international "markets" with it?
SUCK MY PEG, EQUITY BUYING BASTARDS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
PHEW! I was worried about China....Janet too.
So I guess if China markets were a reason not to hike, Janet can now go ahead...right Janet?