HONG KONG: Hong Kong and Shanghai stocks rallied Thursday as traders welcomed a Chinese central bank move to provide billions of dollars in liquidity to institutions in a bid to boost markets.
The Hang Seng Index jumped 3.86 percent, or 795.60 points, to 21,432.84.
The Shanghai Composite Index climbed 2.57 percent, or 83.91 points, to 3,342.77, and the Shenzhen Composite Index on China’s second exchange advanced 2.21 percent, or 42.43 points, to 1,959.74.
Traders cheered as the central bank fleshed out plans to encourage “the healthy and stable development of the capital market” by opening up a “swap facility” worth 500 billion yuan ($70.6 billion) that will allow firms to access cash to buy stocks.
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Companies will be allowed to use equities, bonds and other assets as collateral for “high-grade liquid assets such as treasury bonds and central bank bills”, it said.
The programme may be “further expanded depending on the situation”, it added.
The move comes after authorities last month unveiled several stimulus policies — from interest rate cuts to a relaxation of home-buying rules — after struggling since the end of Covid restrictions to reignite growth and get business activity back on track.
Source: Brecorder
