Chinese injects liquidity and helps boost volatile stock markets
March 2, 2016
On Monday, the People's Bank of China unexpectedly lowered its Reserve Rate Ratio, cutting the amount of cash the country's lenders must hold in reserve. The move was designed to boost liquidity and provide more stimulus to its slowing economy. It was the first such cut since October and comes after a string of volatile days on the mainland's stock markets.
Fresh economic data out on Tuesday though gave little grounds to reassure investors. The closely watched Purchasing Managers' Index, a gauge for the manufacturing sector, shrank more than expected in February.
The PMI index stood at 49.0, down from 49.4 the previous month. Any reading below 50 indicates a contraction of the sector.
Meanwhile Hong Kong's Hang Seng index rose by 0.7% to 19,249.75 points, and in Japan shares fell as fresh economic data suggested the eagerly awaited recovery remained elusive. The Nikkei 225 fell 1.1% to 15,857.37 points.
Earlier, official data showed that household spending was down 3.1% in January, compared to a year earlier. Along with disappointing company spending, it suggests that efforts to boost. In South Korea, the stock market remained closed for a national holiday.