© Reuters
Investing.com — Most Asian stocks fell Monday after China cut key lending rates lower than expected, while hopes for more clues on US monetary policy also dampened sentiment did.
Chinese stocks were by far the worst performers of the day, given that the People’s Bank of China’s (PBOC) rate cut that is smaller than expected suggests limited policy support for the economy. Ta.
Losses spilled over into most regional markets, with most China-related stocks falling.
The focus shifts to the second half of the week, with Asian stocks also continuing their sharp sell-off from the previous week amid growing fears of rising US interest rates.
Chinese stocks fall as PBOC rate cut disappoints
China’s index fell 0.4% and 0.3% respectively, while Hong Kong’s index fell 0.8%.
The People’s Bank of China (PBOC) cut the one-year LPR rate by 10 basis points, but kept the rate used to determine mortgage costs unchanged. Analysts had expected a cut of at least 15 basis points in both rates.
The move shows Asia’s largest economy has limited room to continue to ease monetary policy, which bodes ill for a country struggling with a slowing post-coronavirus recovery.
After a string of rate cuts over the past year, the LPR had already hit the lowest level seen in data dating back to 2013.
Still, losses in Chinese stocks were limited to some extent as the China Securities Regulatory Commission proposed further measures to stabilize the stock market. China’s index hovered near the lows of the year.
Real estate developers in trouble country garden Holdings (HK:) is up nearly 3%, even though its shares are near record lows hit last week.
China’s decline spilled over into the Australian index, which fell 0.1%.
Meanwhile, the Japanese index rose 0.9% after rebounding from last week’s sharp drop. South Korea’s index also rose 0.6%, while Indian index futures started flat.
Fed and U.S. Rates Continue to Watch
Markets are nervous ahead of more clues at the Jackson Hole symposium later this week, especially after recent data showed rising U.S. inflation and a tight labor market continued. was pointed.
The Fed recently suggested it was still considering a rate hike this year, and analysts have steadily scaled down expectations for .
The prospect of rising US interest rates sent most Asian stocks sharply lower last week, and regional sentiment is expected to continue to deteriorate for the foreseeable future.
