China Indexes Extend Rally to Second Consecutive Day, PBoC Lowered 1-Year Loan Rates

Li Chen
25 Sep, 2024
Hong Kong

Stocks rallied for the second day in a row as investors cheered wide aggressive stimulus measures released by the Bank of China. 

The Hang Seng index rose as much as 2.5% and the CSI 300 index advanced 2.2% after the central bank announced additional steps on Wednesday. 

The People's Bank of China lowered its one-year medium-term lending rate to 2.0% from 2.3%, the rate used to load money to financial institutions. 

The latest move follows a raft of measures released by the central bank on Tuesday, ahead of the week of the National Holiday, to revive the faltering economic growth and moribund property market. 

On Tuesday, the central bank lowered its reserve requirement for commercial banks by 50 basis points, trimmed mortgage loan rates on existing loans to 50 basis points, and lowered the down payment requirement to 15% for the purchase of a second home. 

Moreover, the central bank also set up a fund of one trillion yuan to facilitate the purchase of stocks by institutional investors and revive investor confidence. 

The wide-ranging stimulus measures by the central bank were welcomed by investors, but these measures are likely to fall short without additional fiscal measures amid weak consumer demand. 

For now, investors lapped up stocks of real estate developers and high-risk tech stocks amid rising confidence that the central government is serious about reviving economic growth and the property market. 

 

China Movers 

The Hang Seng index increased 1.1% to 19,211.15, and the mainland-focused CSI 300 index advanced 1.5% to 3,400.47. 

Tech stocks and property developers extended their rally for the second day in a row. 

JD.com advanced 1.9% to HK $127.0, Alibaba Group rose 0.2% to HK $92.15, Baidu.com increased 1% to HK $89.80.

China Vanke added 1.9% to HK $4.77, China Resource Land decreased 1.5% to HK $22.05, and Longfor Group added 0.7% to $9.31. 

CATL increased 2.2% to ¥203.30, Kweichow Moutai advanced 2.1% to ¥1,401.90, and AIA Group added 2.2% to HK $60.95.