The share market in China and Hong Kong surged after China’s central bank injected $100 billion into the banking sector, media reports said. The financing is a stimulus in response to the Covid-19 pandemic which has affected the global economy by storm.
Louis Tse Ming-kwong, managing director of VC Asset Management, told the media, “The PBOC [has injected] money into the market, that is the main driver for the stock market today.”
According to the People’s Bank of China, the one -year $100 billion funding is carried out by its medium-term-lending facility, while keeping the interest rates unchanged at 2.95 percent.
It is reported that this week the Hang Seng Index rose 0.7 percent, while the Shanghai Composite Index rose surged 2.3 percent. Banking stocks in China rose by 3.7 percent, while companies such as China Life Insurance and China Merchants Securities rose 10 percent in the upper trading limit on the Shanghai bourse.
Furthermore, in Hong Kong, the stock price of Alibaba slumped 1.6 percent to HK$242.80, while Xiaomi’s stock rose 5.6 percent to HK$16.20 and WuXi Biologics stock surged 4.7 percent to HK$169.00.
The share price of GSP Automotive Group Wenzhou in Shanghai surged 44 percent to 22.42 yuan. In Shenzhen, the share price of Dongguan Aohai Technology rose 44 percent to 38.71 yuan.
Other Asian markets such as Japan’s Nikkei 225 slumped 0.8 percent after the country’s economy suffered major losses in the second quarter. In India, the Sensex and Nifty market is volatile.