China plans to replace its existing benchmark lending rate with a more market-driven interest rate system, the bank said in its statement.
Chinese real estate developers surged on expectations of a boost from the easing move. Country Garden, one of China’s largest developers by sales, jumped 5.8% in Hong Kong.
The reforms “have opened up the door for potential rate cuts and should immediately offer up a [reprieve] to Chinese companies,” wrote Stephen Innes, managing partner for Valour Markets Pte in Singapore, in a research note.
“While not quite the policy bazooka the market so desperately needs … it should provide a much-needed boost to regional sentiment and global commodity prices,” he added.
Chinese stocks with ties to Shenzhen, Hong Kong’s neighboring city, also rallied. The Chinese government on Sunday announced a plan to transform Shenzhen into a global businesses hub and a technology center.
Shenzhen-based Chinese tech giant Tencent climbed 3.2% in Hong Kong. Shenzhen International Holding, a property-focused conglomerate, pulled higher by 7.7% in Hong Kong.
Investors might also be encouraged by the potential for improvement in US-China trade relations. US President Donald Trump said over the weekend that Apple CEO Tim Cook made a “good case” about the effects tariffs were having on the tech company’s business.
Here are some other big moves at 4:45 p.m. Hong Kong time:
- Cathay Pacific Group ( rebounded 0.9% in Hong Kong in a seesaw trading day. The airline carrier announced late Friday it had accepted the resignation of CEO Rupert Hogg and Chief Customer and Commercial Officer Paul Loo. )
- Japan’s exports fell 1.6% in July from a year prior, which was better than what analysts anticipated. Imports dipped 1.2% in July, also beating expectations.
- Stocks in Asia took positive clues from Wall Street. The Dow (rose about 307 points, or 1.3% last Friday. The )S&P 500 (and )Nasdaq (gained 1.4% and 1.7% respectively. )