China stocks move sideways on rate cut disappointment; ICBC hits record on dividend appeal
ICBC, Bank of China and China Construction Bank hit record highs as falling government bond yields boost the appeal of dividend-paying stocks
The broad-based CSI 300 Index rose 0.1 per cent to 3,985.63 at the close, near a two-week high. The Shanghai Composite Index fell less than 0.1 per cent.
Hong Kong’s market is closed up to Thursday for the Christmas holiday.
ICBC and other big state-owned lenders refreshed new highs after a rapid decline in government bonds yields boosted the appeal of high-dividend stocks. Energy and financial stocks were the best-performing sectors on the CSI 300, while material and consumer-discretionary companies declined the most.
The People’s Bank of China (PBOC) kept the interest rate on its one-year medium-term lending facility, a funding tool for commercial lenders, at 2 per cent, indicating China’s reservation to ease policy further before potential new tariffs by the incoming Trump administration. At the same time, the PBOC drained a net 1.15 trillion yuan (US$158 billion) from the financial system through the facility, the most since 2014.
“The market is waiting for effective policy implementation,” said Zheng Xiaoxia, an analyst at Hua An Securities. Amid this vacuum, the market will find little support, so a sideways trading pattern is expected to persist for the time being, she added.