January 7, 2019 / 4:54 AM / 5 months ago

China shares gain after cenbank slashes reserve requirements

    * SSEC 0.4 pct, CSI300 0.4 pct, HSI 0.7 pct
    * Analysts see limit on further macro loosening
    * Yuan strengthens to 6.8455 per dollar

    SHANGHAI, Jan 7 (Reuters) - China stocks climbed on Monday
after the country's central bank slashed the amount of cash that
banks must hold in reserve in an attempt to avoid a sharp
economic slowdown, but worries over growth and trade continue to
dent investor sentiment.
** At midday, the Shanghai Composite index         was 0.44
percent higher at 2,525.83 points. 
** China's blue-chip CSI300 index           was up 0.36 percent,
with its financial sector sub-index             lower by 0.27
percent and the healthcare sub-index down 0.03 percent.
** The People's Bank of China said on Friday it was cutting the
amount of cash that banks have to hold as reserves for the fifth
time in a year, freeing up $116 billion for new lending as it
tries to reduce the risk of a sharp economic slowdown. 
** "The effect of the latest universal RRR cut will depend on
whether the easing money will be eventually channelled to the
real economy, which will depend on the banks' risk appetite,"
OCBC said in a research note.
** "We expect there to be limited room for the market to
continue to fall from its current position. But the economic and
credit cycles remain in a downturn, corporate profitability and
performance growth are weakening, and there is a limit to
further loosening of macro policy," analysts at Guodu Securities
said in a note.
** Chinese H-shares listed in Hong Kong         rose 0.75
percent at 10,105.03, while the Hang Seng Index        was up
0.67 percent at 25,798.31. 
** The smaller Shenzhen index         was up 1.28 percent and
the start-up board ChiNext Composite index             was
higher by 1.53 percent.
** Around the region, MSCI's Asia ex-Japan stock index
                was firmer by 1.33 percent, while Japan's Nikkei
index         was up 2.67 percent.
** The yuan            was quoted at 6.8455 per U.S. dollar,
0.37 percent firmer than the previous close of 6.871. 
** The largest percentage gainers in the main Shanghai Composite
index were Shanghai Zhixin Electric Co Ltd            , which
rose 10.14 percent, followed by Lanzhou LS Heavy Equipment Co
Ltd            , which gained 10.12 percent and Baosheng Science
and Technology Innovation Co Ltd            , which gained 10.1
** The largest percentage losses in the Shanghai index were New
China Life Insurance Co Ltd            , which lost 8.24
percent, followed by Wuhan Hanshang Group Co Ltd            ,
which lost 4.87 percent and Changzhou Tenglong Auto Parts Co Ltd
           , which slipped 3.79 percent.
** So far this year, the Shanghai stock index is up 0.84
percent, while China's H-share index is down 0.9 percent. 
** The top gainers among H-shares were Air China Ltd          ,
which rose as much as 4.33 percent, followed by Dongfeng Motor
Group Co Ltd          , which gained as much as 3.11 percent and
Haitong Securities Co Ltd          , which climbed up to 2.7
** The three biggest H-shares percentage decliners were New
China Life Insurance Co Ltd          , which dropped as much as
7.57 percent, Shenzhou International Group Holdings Ltd
         , which lost up to 2.6 percent and China Gas Holdings
Ltd          , which slipped as much as 1.1 percent.
** About 11.17 billion shares have traded so far on the Shanghai
exchange, roughly 83.3 percent of the market's 30-day moving
average of 13.40 billion shares a day. The volume traded was
16.89 billion, as of last full trading day.
** In Hong Kong, the sub-index of the Hang Seng index tracking
energy shares          rose up to 0.9 percent, while the IT
sector           gained 1.7 percent. The top gainer on the Hang
Seng was WH Group Ltd          , up 2.39 percent, while the
biggest loser was Shenzhou International Group Holdings Ltd
         , which was down 2.57 percent.

 (Reporting by Andrew Galbraith, Editing by Sherry
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