China shares climb

China shares ended higher on Monday after the central bank moved to support economic growth with a broad cut in the amount of cash banks must hold as reserves, but ongoing uncertainty over the economy and outlook for trade continued to weigh on the market. At the close, the Shanghai Composite index was up 0.72 percent at 2,533.09 points. The blue-chip CSI300 index was up 0.61 percent at 3,054.30 points, with its financial sector sub-index lower by 0.23 percent and the healthcare sub-index up 0.27 percent. An index tracking consumer staples gained 1.08 percent.
The People's Bank of China said on Friday it was cutting the amount of cash that banks have to hold as reserves for the fifth time in a year, freeing up $116 billion for new lending as it tries to reduce the risk of a sharp economic slowdown. But analysts downplayed the impact of the cut to banks' reserve requirement ratios (RRRs). "The 100bp RRR cut was largely expected, not a game-changer," Nomura analysts said in a note on Monday.
"We expect there to be limited room for the market to continue to fall from its current position. But the economic and credit cycles remain in a downturn, corporate profitability and performance growth are weakening, and there is a limit to further loosening of macro policy," analysts at Guodu Securities said in a note. The smaller Shenzhen index ended up 1.71 percent and the start-up board ChiNext Composite index was higher by 1.839 percent.
Around the region, MSCI's Asia ex-Japan stock index was firmer by 1.28 percent, while Japan's Nikkei index closed up 2.44 percent. At 07:19 GMT, the yuan was quoted at 6.851 per US dollar, 0.29 percent firmer than the previous close of 6.871. The currency strengthened to a one-month high against the dollar on Monday.
The largest percentage gainers on the main Shanghai Composite index were Shanghai Zhixin Electric Co Ltd, up 10.14 percent, followed by Lanzhou LS Heavy Equipment Co Ltd, gaining 10.12 percent, and Fujian Furi Electronics Co Ltd, up by 10.11 percent. The largest percentage losers on the Shanghai index were New China Life Insurance Co Ltd, down 6.72 percent, followed by Wuhan Hanshang Group Co Ltd, losing 3.82 percent, and Fushun Special Steel Co Ltd, down by 3.28 percent.
So far this year, the Shanghai stock index is up 1.6 percent, the CSI300 has risen 1.4 percent and China's H-share index listed in Hong Kong is down 0.1 percent. About 17.73 billion shares were traded on the Shanghai exchange, roughly 132.3 percent of the market's 30-day moving average of 13.40 billion shares a day. The volume in the previous trading session was 16.89 billion.