China, Hong Kong stocks rise on hopes of lower financing costs

Shenzhou International group

30/12/2019 04:39

* SSEC +0.9%, CSI300 +1.2%, HSI +0.6%
    * HK->Shanghai Connect daily quota used 2.6%, Shanghai->HK
daily
quota used 1.2%
    * FTSE China A50 +1.1%

    SHANGHAI, Dec 30 (Reuters) - China and Hong Kong stocks rose
on Monday on expectation Beijing's decision to switch the
benchmark for floating-rate loans could lower financing costs,
while a solid forecast for retail sales in 2019 also supported
investor sentiment.   
    ** The CSI300 index  .CSI300  rose 1.2%, to 4,071.95, by the
end of the morning session, while the Shanghai Composite Index
 .SSEC  gained 0.9%, to 3,033.33. 
    ** The Hang Seng index  .HSI  added 0.6%, to 28,403.75,
while the Hong Kong China Enterprises Index  .HSCE  gained 0.6%,
to 11,264.43. 
    ** China's central bank will use the loan prime rate (LPR)
as a new benchmark for pricing existing floating-rate loans, in
a step that analysts say could help lower borrowing costs and
underpin economic growth.  urn:newsml:reuters.com:*:nL4N292017 
    ** "The purpose of the step is to make interest rates more
market-driven and help lower financing costs," said Wen Bin, an
economist at Minsheng Bank in Beijing. 
    ** Overall it's a favourable news for the equities market,
though the impact on bond market could be quite limited, Huatai
Securities said in a report. 
    ** China's retail sales are expected to increase 8% in 2019
to 41.1 trillion yuan ($5.89 trillion), the official Xinhua News
Agency reported on Monday.  urn:newsml:reuters.com:*:nB9N28L01V 
    ** Consumer  .CSI000912  and securities firms  .CSI399707 
led the gains on the mainland, while banks  .CSI000951 
retreated as their profitability is likely to be hit by the LPR
move.  urn:newsml:reuters.com:*:nL4N2940EB  
    ** The Commerce Ministry has "proactively dealt with" trade
frictions with the United States this year, it said on Sunday
after an annual work conference.  urn:newsml:reuters.com:*:nL4N29301G  
    ** Around the region, MSCI's Asia ex-Japan stock index
 .MIAPJ0000PUS  was firmer by 0.22%, while Japan's Nikkei index
 .N225  was down 0.69%.
    ** The yuan  CNY=CFXS  was quoted at 6.982 per U.S. dollar,
0.19% firmer than the previous close of 6.9956. 
    ** As of 0410 GMT, China's A-shares were trading at a
premium of 25.72% over the Hong Kong-listed H-shares.

($1 = 6.9818 Chinese yuan)  

 (Reporting by Luoyan Liu and Brenda Goh; Editing by Subhranshu
Sahu)
 ((luoyan.liu@thomsonreuters.com; Reuters Messaging:
luoyan.liu.thomsonreuters.com@reuters.net))