Shares in Asia stumbled in early trade on Monday as investors waited with bated breath as China’s markets prepare to reopen following a week-long holiday and after its central bank cut banks’ reserve requirements in a bid to support growth. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3 percent, after major stock markets around the world fell for a second straight day on Friday. European markets were also set to weaken, with financial spread-betters expecting the FTSE to open 0.07 percent lower, Frankfurt’s DAX down 0.03 percent, and Paris’ CAC down 0.1 percent.
The People’s Bank of China (PBOC) on Sunday cut the level of cash that banks must hold as reserves, aimed at lowering financing costs as policymakers worry about fallout from the tariff row with the United States.
Reserve requirement ratios (RRRs) - currently 15.5 percent for large commercial lenders and 13.5 percent for smaller banks - will be cut by 100 basis points effective Oct. 15, the PBOC said, matching a similar-sized move in April.
Asian shares were also hit on Monday as investors in Chinese stocks reacted for the first time to new pressure from Washington and a report that Chinese spies had compromised U.S. hardware.
At 0540 GMT, China’s blue-chip CSI300 index was 3.5 percent lower while the main Shanghai Composite Index was down 2.9 percent. The tech-heavy ChiNext board fell 3.08 percent.
Channel NewsAsia
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