Chinese Equities Decline as Traders Brush aside Rate Cut – Asia Market Wrap
Chinese equities fell as a drop in the country’s mortgage reference rate failed to alleviate concerns about the world’s second-largest economy. The currency tracked an increase in US rates.
Stocks on the mainland and in Hong Kong fell Tuesday, while those in Japan reversed earlier gains. Benchmarks in Australia and South Korea also fell. European futures were down, while Nasdaq 100 contracts dipped after US markets were closed on Monday for a holiday.
The changes in Chinese shares came after domestic banks reduced a major mortgage reference rate by a record amount, indicating that the country was increasing support for the housing sector in an effort to boost demand. An index of Chinese developer stocks initially rose but swiftly reversed the majority of its gains.
Gains in Chinese markets on Monday fell short of expectations in the first session after the Lunar New Year break. An increase in trading activity for some exchange-traded funds in the country indicated that state-backed funds were still supporting the market.