China stocks ended higher on Monday as a key Chinese lending rate was cut for the second time this year to shore up the coronavirus-hit economy. At the close, the Shanghai Composite index was up 0.5% at 2,852.55.
The blue-chip CSI300 index was up 0.36%, with its financial sector sub-index higher by 0.2%, the consumer staples sector up 0.38%, the real estate index down 0.39% and the healthcare sub-index up 0.7%.
The smaller Shenzhen index ended up 1.01% and the start-up board ChiNext Composite index was higher by 1.122%.
China cut its benchmark lending rate as expected to reduce borrowing costs for companies and prop up the economy, after it contracted for the first time in decades.
The one-year loan prime rate (LPR) was lowered by 20 basis points (bps) to 3.85% from 4.05% previously, while the five-year LPR was cut by half as much to 4.65% from 4.75%.
Most new and outstanding loans are based on the LPR, while the five-year rate influences the pricing of mortgages. The LPR is a lending reference rate set monthly by 18 banks.
"The asymmetric cut suggests that authorities will stick to the tight housing policy. It will not be deemed as a tool to stimulate domestic demand, even at this difficult time," said Xing Zhaopeng, markets economist at ANZ in Shanghai.
China has plenty of room for manoeuvre in its macroeconomic policy to cushion against the impact of the coronavirus, officials at the National Development and Reform Commission said. China reported 12 new confirmed coronavirus cases on April 19, down from 16 a day earlier, with no new deaths, the country's health authority said.
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