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Mainland Chinese stocks surge as China keeps benchmark lending rate unchanged - CNBC

Mainland Chinese stocks surged on Monday, as China maintained its benchmark lending rate for the third straight month.

Continuing their recovery from a plunge last week, the Shanghai composite jumped 2.63% while the Shenzhen composite was up 1.75%. The Shenzhen component jumped 2.10%.

Over the weekend, China's regulators raised the limit on how much insurers can invest in equity assets to 45%, according to Reuters, in an effort to bring more long-term funds into the market. 

China kept both its one-year and five-year loan prime rate unchanged, according to Reuters, as its economy continued to recover after reopening following the coronavirus crisis. Last week, official data showed that its economy grew 3.2% in the second quarter from a year earlier, better than the 2.5% expected by analysts, according to Reuters.

Over in Hong Kong, the Hang Seng index was flat after tumbling in the morning. The city tightened restrictions again after reported cases surged to more than 100 in 24 hours over the weekend. Hong Kong leader Carrie Lam said the situation was "very serious and there is no sign of it coming under control," according to Reuters.

Other Asian markets mostly fell.

Japan's Nikkei 225 dipped 0.13%, while the Topix was flat.

Japan's exports dived 26.2% in June from a year earlier, data showed, according to Reuters. That was a worse decline than expected as economists in a Reuters poll had predicted a 24.9% decline. Imports fell 14.4%, compared with expectations of a 16.8% decline, according to Reuters.

In May, Japan's exports had fallen 28.3%, the fastest pace since the global financial crisis as U.S.-bound car shipments plunged, according to Reuters.

Autos, a big export sector for Japan, fell. Nissan dived 3.12%, Mitsubishi Motor tumbled 2.12% and Suzuki declined 3.79%.

Shares in Australia deepened losses, with the S&P/ASX 200 declining 0.54% as financials saw declines across the board. Over in South Korea, the Kospi slipped 0.13%.

Overall, MSCI's broadest index of Asia-Pacific shares outside Japan edged down 0.12%.

Currencies and oil 

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.009, recovering from levels above 95 earlier.  

The Japanese yen traded at 107.27 per dollar, after a turbulent previous week where it traded at around levels between 106 and 107. The Australian dollar touched the 0.70 level briefly in the morning, before falling back to 0.6986.

Oil prices fell in the afternoon of Asian trading hours. International benchmark Brent crude futures were down 0.65% to $42.86 per barrel. U.S. crude futures also dipped 0.69% to $40.31 per barrel.

What's on tap (all times in HK/SIN):

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

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July 20, 2020 at 06:27AM
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Mainland Chinese stocks surge as China keeps benchmark lending rate unchanged - CNBC
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