Markets Rally After Rate Cuts
The Hang Seng China Enterprises Index rose more than 2% early on Wednesday. The CSI 300 Index, a benchmark for onshore shares, advanced as much as 1.5%.
China reduced its policy rate and lowered the amount of cash lenders must keep in reserve at a press briefing attended by the People’s Bank of China’s governor and other key officials. That came just hours after Washington and Beijing confirmed trade discussions will start this weekend, setting the stage for an easing of tensions after a monthlong standoff on tariffs.
Onshore Chinese stocks and bonds have been notably stable in recent weeks, relative to turbulent global markets. Volatility in the CSI 300 Index fell to a record low last month.
Asian Markets In Focus
Still, the country’s shares have underperformed some of their Asian peers, which have staged a sharp rebound since President Donald Trump’s April 2 tariff onslaught, due to concerns over the impact of the trade war.
“Beijing is pulling multiple levers to revive market confidence,” said Charu Chanana, chief investment strategist for Saxo Markets in Singapore. “It’s a much-needed dose of optimism for Chinese equities and sends a strong message of resilience in the face of escalating tariff threats. Beijing is making it clear that it’s not waiting for a US-China resolution — it’s cushioning the economy now and preparing for a longer game.”
A further rally in stocks will hinge on any progress made in this week’s discussions. US Treasury Secretary Scott Bessent, in an interview on Fox News, said “we’ve got to deescalate before we move forward.” China will not sacrifice its principled stance or international fairness to seek any agreement, the Ministry of Commerce said in a statement.
Read Also: China cuts key rate, reserve ratio to aid economy hit by tariffs
(Edited by : Juviraj Anchil)
