SHANGHAI: China and Hong Kong stocks saw their best day since March on Monday, tracking gains in global peers after US authorities stepped in to limit the fallout from the collapse of Silicon Valley Bank (SVB).
The rally also came as investors cheered more evidence of China’s recovery, and after Beijing surprised by keeping the head of the central bank and finance minister in their posts at the annual session of parliament on Sunday.
The blue-chip CSI 300 Index closed 1.1% higher, and Hong Kong’s Hang Seng benchmark surged 2%, both logging their biggest daily gains since March 1.
The US regulators’ move “cut off the spread of pessimism among depositors in the short term, gave the market confidence, and prevented bank runs,” said Pang Xichun, research director at Nanjing RiskHunt Investment Management Co.
“Uncertain fundamentals put pressure on the US dollar and led to passive appreciation in the yuan, which will benefit China assets in the near term.” Analysts at Goldman Sachs wrote: “In light of the stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its next meeting on March 22.”
In a joint statement, the US Treasury and Federal Reserve announced a range of measures to stabilise the banking system and said depositors at SVB would have access to their deposits on Monday, sending US stock futures up.
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