China stocks end higher as key rate cut again

China stocks ended higher on Monday as a key Chinese lending rate was cut for the second time this year to shore up the coronavirus-hit economy. ** At the close, the Shanghai Composite index was up 0.5% at 2,852.55.

** The blue-chip CSI300 index was up 0.36%, with its financial sector sub-index higher by 0.2%, the consumer staples sector up 0.38%, the real estate index down 0.39% and the healthcare sub-index up 0.7%. ** The smaller Shenzhen index ended up 1.01% and the start-up board ChiNext Composite index was higher by 1.122%.

** China cut its benchmark lending rate as expected to reduce borrowing costs for companies and prop up the economy, after it contracted for the first time in decades. ** The one-year loan prime rate (LPR) was lowered by 20 basis points (bps) to 3.85% from 4.05% previously, while the five-year LPR was cut by half as much to 4.65% from 4.75%.

** Most new and outstanding loans are based on the LPR, while the five-year rate influences the pricing of mortgages. The LPR is a lending reference rate set monthly by 18 banks. ** "The asymmetric cut suggests that authorities will stick to the tight housing policy. It will not be deemed as a tool to stimulate domestic demand, even at this difficult time," said Xing Zhaopeng, markets economist at ANZ in Shanghai.

** China has plenty of room for manoeuvre in its macroeconomic policy to cushion against the impact of the coronavirus, officials at the National Development and Reform Commission said. ** China reported 12 new confirmed coronavirus cases on April 19, down from 16 a day earlier, with no new deaths, the country's health authority said.

** Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.62%, while Japan's Nikkei index closed down 1.15%. ** As of 07:10 GMT, China's A-shares were trading at a premium of 26.97% over the Hong Kong-listed H-shares.