After so many falls, shares rise at last.
Chinese shares gained nearly 6% Thursday after the government introduced fresh measures to inspire buying in the stock market. They include banning shareholders at from selling their holdings, allowing banks to roll over loans secured by shares, renewed pledge by the central bank to infuse liquidity into the market, and the expansion of stock purchases to include more small-and-medium-sized firms.
But skepticism remains. Some still doubt whether Thursday’s rise will be sustained given that nearly half of the listed-firms suspended trading of their shares, although Allianz Global Investors declared in a statement that the “worst of the retail forced margin selling” in China’s stock market is over. The rout that began middle of last month was largely blamed on the unwinding of shares funded by margin loans.
Meanwhile, China’s consumer inflation remains tame, though it eased up a bit last month, giving monetary authorities extra leeway to further cut interest rates to spur the economy that’s facing its lowest growth rate in more than two decades this year. The economic picture in Korea is a bit grim as the central bank cut its growth estimate this year. Read on…
China shares end higher after new market-boosting measures are unveiled. The Shanghai Composite Index ended the day up 5.8%, its best recovery since 2009, while the Hang Seng Index was last seen trading 4.1% higher. Japan’s Nikkei was up 0.6% at the close. CNBC/Financial Times (paywall)
China relaxes bank loan rule to ease selling pressure in stocks. The country’s regulator will allow banks to roll over loans secured by shares and adjust the required collateral. Lenders are also being encouraged to support share buybacks of companies by offering them collateralized loans. Bloomberg
China drafts cybersecurity law. The draft law allows authorities to cut Internet access in times of public-security emergencies, and requires government agencies to put up measures on cybersecurity monitoring and alert systems. The draft was released this week for comments. The Wall Street Journal (paywall)
China’s mixed inflation picture. The consumer price index quickened to 1.4% in June from a year earlier, faster than May’s 1.2%, and above the 1.3% forecast. While the CPI rose slightly, it was still manageable. The producer price index, meanwhile, dropped 4.8% year-on-year in June, a steeper fall from the previous month’s 4.6% decline. Financial Times (paywall)/Xinhua
Korea central bank cuts GDP forecast, keeps rates steady. The Bank of Korea lowered its growth estimate this year to 2.8% from 3.1%, even if policymakers decided to keep its key rates unchanged at record lows. Financial Times (paywall)
Photo credit: Rog b via Flickr