China stocks close up as cabinet promises timely cut in reserve requirement ratio

The blue-chip CSI300 index rose 1.3%, to 4,191.57, while the Shanghai Composite Index gained 1.2% to 3,225.64 points.

The State Council said on Wednesday China would step up financial support for the real economy, especially industries and small firms hit by the pandemic, and will lower financing costs.

“It is very likely that the PBoC could cut RRR by 50bp for most banks in the next several days,” said Nomura in a note. “These monetary measures and other policies are likely to have little positive impact. In our view, refining and adjusting the ZCS (zero-COVID strategy) is key to a growth recovery.”

A vast majority of market participants in a Thursday Reuters poll believe the central bank may opt not to cut borrowing costs on its medium-term policy loans this week, while a RRR cut would be imminent.

Mainland China reported 29,411 new coronavirus cases on Wednesday, of which 3,020 were symptomatic and 26,391 were asymptomatic.

However, President Xi Jinping said China must not relax COVID control and prevention measures, state radio reported.

U.S. Treasury Secretary Janet Yellen said China should help end Russia’s “heinous war” in Ukraine or face a loss of its standing in the world.

Consumer staples climbed 3.7%, with liquor makers up 5.2%, while real estate developers jumped 4.4%.

Energy shares gained 3.1%, with coal surging 4.8%, while tourism stocks ended up 2.5%.