China shares fell on Monday. Traders were still concerned about whether they would need adequate policy support to stimulate growth; After the lenders left the borrowing costs unchanged. The CSI 300 index fell 1%, thus erasing the previous gain of 0.5%. Price-sensitive financial and real estate developers weighed in on the market. The Hang Seng China Enterprises Index dropped 2.2%, Which changed the previous advance of a similar scale.
On Monday, traders were frustrated after Chinese lenders left the key interest rate unchanged. They were looking for signs of other policies that would support the recent rally. Speculation about more easing grew after the Supreme Finance Committee, chaired by the vice-premier; on March 16, promised that monetary policy would become more “proactive” to strengthen the economy and stabilize financial markets.
According to a modular Asset Management strategist, some may today meet expectations of a reduction in LPR; This will happen later when they estimate growth retardation due to the explosion. The peace talks and Xi-Biden’s call also did not yield substantial results. Last week’s attraction was after a volatile trading session on Monday When Chinese stocks made a stunning turnaround after a historic two-day sell-off as authorities stepped in.
On Monday, the state-owned Chinese Securities Magazine again urged investors to be optimistic about its policy support for the local stock market. The newspaper also reports that 30 companies registered in Shanghai have offered to buy nearly $1.6 billion worth of shares this month to build trust.
Meanwhile, Chinese real estate developers’ track record fell by 3.7%. Moody says Beijing support measures will not eliminate default risks for developers. Debt-laden China Evergrande Group stopped trading. The CSI 300 financial index also performed poorly in the market; it decreased by 2.2%.
Economists expect a reduction in the reserve requirement ratio shortly. A possible decrease in the medium-term lending rate should come next month. According to experts, there may be an initial decline. However, expectations of a policy weakening are still in sight. An RRR or rate reduction in the second quarter is expected. Traders are also vigilant about the events surrounding the Ukraine war. Following a meeting between the Chinese and US presidents on Friday, China’s top envoy to Washington vowed that his country would “do everything possible” to defuse tensions in Ukraine; After Xi convinced Biden that his country was not in favor of war.
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