April 18, 2018 / 7:29 AM / 8 months ago

China stocks end higher after reserve ratio cut buoys banks

* Shanghai stocks higher, blue-chip CSI300 index up

* Gains in Shanghai stocks led by Keda Group Co Ltd and losses by Harbin Air Conditioning Co Ltd

* China’s A-shares are at a 22.98 percent premium over H-shares

SHANGHAI, April 18 (Reuters) - China stocks ended higher on Wednesday, buoyed by banking firms, after a surprise cut in reserve requirements.

** The blue-chip CSI300 index rose 0.5 percent to 3,766.28, while the Shanghai Composite Index gained 0.8 percent to 3,091.40. ** Chinese banking shares closed up 1.1 percent, after the central bank said late on Tuesday it was slashing reserve requirement ratios (RRRs) for most banks by 100 basis points (bps). ** The move will reduce financing costs for banks and free up more funds for lending to small firms, but falls short of broad monetary easing, with the authority attaching requirements on how funds must be used. ** “The ratio cut doesn’t constitute broad monetary easing. But it does signal that - despite the recent strength of the official data - policymakers are starting to balance concerns about economic conditions alongside their longstanding desire to contain credit risks,” said Mark Williams, chief Asia economist at Capital Economics. ** That was echoed by UBS Securities, which added that recent market turmoil and fragile sentiment amid rising trade frictions may be a minor policy concern. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.43 percent, while Japan’s Nikkei index closed up 1.42 percent. ** At 07:16 GMT, the yuan was quoted at 6.2881 per U.S. dollar, 0.04 percent weaker than the previous close of 6.2855. ** The largest percentage gainers on the main Shanghai Composite index were Keda Group Co Ltd up 10.05 percent, followed by China National Software & Service Co Ltd gaining 10.01 percent and Xiangtan Electric Manufacturing Co Ltd up by 10.01 percent. ** The largest percentage losers on the Shanghai index were Harbin Air Conditioning Co Ltd down 9.99 percent, followed by Cultural Investment Holdings Co Ltd losing 9.63 percent and Lawton Development Co Ltd down by 8.64 percent. ** As of 07:17 GMT, China’s A-shares were trading at a premium of 22.96 percent over the Hong Kong-listed H-shares. (Reporting by Shanghai Newsroom; Editing by Biju Dwarakanath)

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