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Montevideo, February 20th 2019 - 07:32 UTC

Chinese injects liquidity and helps boost volatile stock markets

Tuesday, March 1st 2016 - 07:55 UTC
Full article 19 comments
On Monday, the People's Bank of China unexpectedly lowered its Reserve Rate Ratio, cutting the amount of cash the country's lenders must hold in reserve. On Monday, the People's Bank of China unexpectedly lowered its Reserve Rate Ratio, cutting the amount of cash the country's lenders must hold in reserve.

Chinese shares traded higher on Tuesday morning after a fresh stimulus push from the central bank to boost liquidity. The mainland benchmark Shanghai Composite rose 0.3% to 2,696.96 points.

 On Monday, the People's Bank of China unexpectedly lowered its Reserve Rate Ratio, cutting the amount of cash the country's lenders must hold in reserve. The move was designed to boost liquidity and provide more stimulus to its slowing economy. It was the first such cut since October and comes after a string of volatile days on the mainland's stock markets.

Fresh economic data out on Tuesday though gave little grounds to reassure investors. The closely watched Purchasing Managers' Index, a gauge for the manufacturing sector, shrank more than expected in February.

The PMI index stood at 49.0, down from 49.4 the previous month. Any reading below 50 indicates a contraction of the sector.

Meanwhile Hong Kong's Hang Seng index rose by 0.7% to 19,249.75 points, and in Japan shares fell as fresh economic data suggested the eagerly awaited recovery remained elusive. The Nikkei 225 fell 1.1% to 15,857.37 points.

Earlier, official data showed that household spending was down 3.1% in January, compared to a year earlier. Along with disappointing company spending, it suggests that efforts to boost. In South Korea, the stock market remained closed for a national holiday.

Categories: Economy, International.

Top Comments

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  • Brasileiro

    In 2016 Brazil will have a foreign exchange surplus of 70 billion dollars that will help give more liquidity to the Chinese market through the formation of international reserves.

    In addition, if necessary we can draw our reserves in dollars (376 billions) and deposit them in Yuans in the People's Bank of China.

    Mar 01st, 2016 - 12:16 pm 0
  • T_Paine

    This didn't work the last 15 times they tried it.
    Its not going to work now

    This will be more fun to watch than Venezuela

    Watch 100s of billions flow into the USA and out of The Party clutches

    Mar 01st, 2016 - 01:49 pm 0
  • Brasileiro

    “Give to Caesar what is Caesar's.”

    The BRICS will provide China the necessary conditions for it to get rid of Western speculative capital without major consequences.

    “Who lives by the dollar, die for the dollar.”

    BRICS

    Mar 01st, 2016 - 02:01 pm 0
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