Asian markets started the new week with a rising following the positive effect from the US markets on Friday and the liquidity step of the Central Bank of China.
Shares of Japan and Hong Kong rose. Despite the rise in the events in Sydney, the largest city of Australia, an increase was recorded in the markets.
Chinese shares led the rise in Asia. The ChiNext index rose 4.3 percent to its highest level since June 2015.
Necessary response step from China
The positive effects of China’s mandatory reserve step were observed in Asian markets.
China has cut the bank reserve requirement ratio to support the economy.
The People’s Bank of China reduced the reserve requirement ratio by 0.5 percentage points. In a statement made by the People’s Bank of China, it was stated that the change will take effect from July 15.
With the mandatory reserve change, 1 trillion yuan liquidity will be released to the market. The PBOC announced that the change does not mean a change in the macroprudential policy stance, and that they will not flood the market with liquidity.