* HK->Shanghai Connect daily quota used 7.4%, Shanghai->HK daily quota used 4.2%
* FTSE China A50 +1.7%
SHANGHAI, Aug 19 (Reuters) - China stocks jumped over 2% on Monday, their best since early July, as investors cheered Beijing’s latest stimulus to prop up an economy hit hard by a never-ending trade war with the United States.
** The CSI300 index rose 2.2%, to 3,791.09 points, while the Shanghai Composite Index gained 2.1%, to 2,883.10 points.
** Both indexes were up for the fourth day in a row.
** China’s central bank unveiled a key interest rate reform on Saturday to help steer borrowing costs lower for companies and support a slowing economy that has been hurt by the trade war with the United States.
** The move, widely seen as a guided rate cut, came after Beijing’s latest plan to spur private consumption to shore up growth.
** The rate reform will further boost expectations of monetary policy loosening in the short term, helping lift risk appetite, China Merchants Securities noted in report.
** In the longer term, there would be stronger support for the stock market as companies’ expected investment returns could benefit from lower borrowing costs, thus improving financing needs and alleviating the downward pressure on the economy, the brokerage added.
** Shares in securities firms, which are expected to benefit from a market rally, led the gains, with an index tracking major brokerages surging 6.9%.
** The CSI300 real estate index, tracking major developers which are expected to benefit from lower borrowing costs, closed up 3.3%.
** Though banking firms lagged behind, as lenders expected their profitability to come under pressure after the rate reform.
** “(China’s banks will) face a narrower net interest margin. This is because all banks need to quote according to a more market-based interest rate, and competition on loans will increase,” analysts at ING wrote in report.
** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 1.25%, while Japan’s Nikkei index closed up 0.71%.
** At 07:14 GMT, the yuan was quoted at 7.0462 per U.S. dollar, 0.06% weaker than the previous close of 7.042.
** About 21.45 billion shares were traded on the Shanghai exchange, roughly 140.6% of the market’s 30-day moving average of 15.26 billion shares a day. The volume in the previous trading session was 14.86 billion.
** As of 07:15 GMT, China’s A-shares were trading at a premium of 30.63% over the Hong Kong-listed H-shares.
Reporting by Shanghai Newsroom; Editing by Subhranshu Sahu