File Photo:VCG
Friday's reserve requirement ratio (RRR) cut will further enhance market confidence and help the capital market operate smoothly, and Chinese stock market will maintain stable on Monday, experts said, although the move fell short of market expectations.
The cut may benefit insurance and real estate shares, while other sectors may not be affected, Dong Dengxin, Director of the Finance and Securities Institute of the Wuhan University of Science and Technology, told the Global Times on Sunday.
Moreover, as Shanghai issued guidelines for the resumption of work and operations, the enterprises affected by the virus, including those in the financial, auto and integrated circuits industries, may rally next week, experts claimed.
"The RRR cut is aimed at injecting liquidity to the real economy by expanding the availability of funds of financial institutions for lending and will have a small impact on the stock market. Therefore, the Chinese stock market will maintain stable," Dong said.
Chinas central bank announced a cut of the RRR on Friday, adding that the measure will release about 530 billion yuan ($83.19 billion) in capital.