November 18, 2019 / 7:24 AM / 24 days ago

China stocks rise after interbank lending rate cut

SHANGHAI, Nov 18 (Reuters) - China stocks ended Monday firmer, as investors hoped for more stimulus measures to shore up the slowing economy after a interbank lending rate cut.

** The blue-chip CSI300 index rose 0.8%, to 3,907.93, while the Shanghai Composite Index added 0.6% to 2,909.20.

** China’s central bank unexpectedly trimmed a closely watched lending rate on Monday, the first such cut in more than four years and a signal to markets that policymakers are ready to act to prop up slowing growth.

** Analysts say the cut also shows the central bank is keen to ease investor worries that higher retail inflation would prevent it from delivering fresh stimulus.

** “I expected an easing move from the PBOC, just didn’t know when,” said a Hong Kong-based portfolio manager. “The (high) Consumer Price Index (CPI) was only pig CPI. Everything else is in big trouble.”

** China’s strongest consumer inflation in nearly eight years won’t deter the central bank from cutting a key interest rate next week, as slowing economic growth is a bigger concern for policymakers, traders and fund managers said.

** Investors were also eyeing developments in the Sino-U.S. trade talks.

** China and United States had “constructive talks” on trade in a high-level phone call on Saturday, state media Xinhua said.

** U.S. President Donald Trump had not yet agreed to remove any tariffs as part of a deal, and the size of China’s commitment to purchase U.S. farm products was not yet clear, Commerce Secretary Wilbur Ross said on Friday in an interview on Fox Business Network.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.41%, while Japan’s Nikkei index closed up 0.49%.

** At 07:04 GMT, the yuan was quoted at 7.0139 per U.S. dollar, 0.1% weaker than the previous close of 7.0072.

** As of 07:05 GMT, China’s A-shares were trading at a premium of 29.19% over the Hong Kong-listed H-shares. (Reporting by Shanghai Newsroom; Editing by Shailesh Kuber)

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