China stocks rally after central bank cuts RRR

The Nasdaq-style ChiNext enterprise board posted the strongest gain by surging 2.16 percent to finish at 1,822.26.

China’s stocks rallied today, with the Nasdaq-style ChiNext index posting the strongest gains, as they were buoyed by the central bank’s latest move to cut reserve requirement ratio for commercial lenders, .

The Shanghai Composite Index, the country’s major benchmark, rose 0.8 percent to close at 3,091.40 today.

The Shenzhen Component Index added 0.92 percent to close at 10,491.15 points while the Nasdaq-style ChiNext enterprise board surged 2.16 percent to finish at 1,822.26, lifted by the robust performance of domestic chip companies.

Shares of SGCircuits, a Shenzhen-based technology company, jumped by the 10 percent daily limit to end at 46.48 yuan each.

Shenzhen-headquartered Nationz Technologies, a leading provider of secure IC products and services in Internet identification authentication, closed at 9.46 yuan per share.

The People’s Bank of China announced late Tuesday a 100 basis points cut in the amount of cash that most commercial lenders must hold with the central bank as reserves. Market sentiment rose after the unexpected move whcih was set to inject 400 billion yuan in new liquidity to the market, according to industry observers.

Gu Yongtao, a strategist at Cinda Securities, said the PBOC's decision will ease liquidity pressure in the capital markets, according to Caixin’s report.

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