China’s stocks climb as US Fed rolls out unprecedented measures to shield economy

Source:Global Times Published: 2020/3/24 11:23:05

Investors watch stock market data at a security exchange office in Chengdu, Southwest China's Sichuan Province on Tuesday. Photo: VCG



China's share trading in both the mainland and Hong Kong strengthened during Tuesday's morning session as the US Federal Reserve's released a round of massive measures to protect its economy from the fallout of the virus.

Chinese mainland shares had climbed by 11 am on Tuesday, with the Shanghai Composite Index up 1.86 percent, the Shenzhen Component Index up 1.97 percent, and the ChiNext board up 2.19 percent.

Beer shares strengthened during the session, with Tsingtao Beer rising by the daily limit of 10 percent to 43.27 yuan ($6.10), and Chongqing Beer Co climbing 4.86 percent to 42.96 yuan.

Yang Delong, chief economist at the Shenzhen-based First Seafront Fund Management Co, said the A-share rebound following days of decline and the Fed's unlimited quantitative easing (QE) leveraging external markets had jointly contributed to the A-share rise.

On Monday, the Fed announced it would buy unlimited government debt and corporate and municipal bonds to maintain borrowing costs at a low level, amid all-in efforts to reduce economic disruption from the coronavirus outbreak.

Hong Kong's Hang Seng Index had edged up 4.13 percent by 11 am, with gold and aviation shares leading the growth.

China Silver Group soared 11.54 percent to HK$0.58 ($0.07) and Hainan Meilan International Airport Company Ltd was up 6.08 percent to HK$6.46.

Some Chinese economists have advised investing in gold as the US dollar is forecast to depreciate following the Fed's unprecedented move.

Gold for April delivery (GCJ20) on COMEX on Monday increased $83, or 5.6 percent, to settle at $1,567.60 an ounce.

Li Xunlei, chief economist at the Shanghai-based Qilu Asset Management, said on Tuesday that the gold surging phenomenon was also seen during 2008 financial crisis.

The yuan's central parity rate against the US dollar weakened 59 basis points to 7.0999 on Tuesday as the Fed announced unprecedented "unlimited QE" and a new round of lending programs to support the US economy.

However, the onshore yuan against the dollar opened nearly 400 basis points higher on Tuesday morning, to around 7.08 by press time, while the offshore yuan rose over 100 basis points to about 7.10.

Global Times

Posted in: MARKETS

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