The monetary easing helped lift the stock
market nearly 30 percent so far this year, the best performer in Asia
and easily outpacing major U.S. and European indexes.
Property shares
were outperforming the market, with the CSI300 sub-index .CSICMREI
rising 1.4 percent while banking shares were down 1.2 percent on
concerns the latest move by the central bank to liberalize interest
rates would heat up competition in the sector and put pressure on
margins.
As part of structural reforms, the PBOC lifted the ceiling for deposit rates on Sunday to 1.5 times the benchmark level, the biggest increase in the ceiling since it began to liberalize the interest rate system in 2012.
Shares on the ChiNext board .CHINEXTC, China's version of the U.S. Nasdaq, were up 3.5 percent. Traders said investors were favoring ChiNext shares because they were little affected by regulator moves to tighten rules in margin trading.
"I expect to see the market continue to swing widely this week," said Xiao Shijun, analyst at Guodu Securities in Beijing. "The cumulative effect from rate cuts will push up share prices gradually."
China's money market benchmark, the weighted average of the seven-day repo rate CN7DRP=CFXS fell 9 basis points to 2.20 percent, its lowest since May 2012.
"The market believes the PBOC will continue monetary easing by cuts in bank required reserve ratios and interest rates, so there is potential for further falls in money market rates," said a trader at an Asian bank in Shanghai.
"The seven-day repo rate will continue falling in the medium term, but 2 percent may be a strong support."
China's yuan steadied at 6.21 per dollar, little changed from Friday's close, after the PBOC set the midpoint rate CNY=SAEC at 6.1132 per dollar.
As part of structural reforms, the PBOC lifted the ceiling for deposit rates on Sunday to 1.5 times the benchmark level, the biggest increase in the ceiling since it began to liberalize the interest rate system in 2012.
Shares on the ChiNext board .CHINEXTC, China's version of the U.S. Nasdaq, were up 3.5 percent. Traders said investors were favoring ChiNext shares because they were little affected by regulator moves to tighten rules in margin trading.
"I expect to see the market continue to swing widely this week," said Xiao Shijun, analyst at Guodu Securities in Beijing. "The cumulative effect from rate cuts will push up share prices gradually."
China's money market benchmark, the weighted average of the seven-day repo rate CN7DRP=CFXS fell 9 basis points to 2.20 percent, its lowest since May 2012.
"The market believes the PBOC will continue monetary easing by cuts in bank required reserve ratios and interest rates, so there is potential for further falls in money market rates," said a trader at an Asian bank in Shanghai.
"The seven-day repo rate will continue falling in the medium term, but 2 percent may be a strong support."
China's yuan steadied at 6.21 per dollar, little changed from Friday's close, after the PBOC set the midpoint rate CNY=SAEC at 6.1132 per dollar.
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