HONG KONG – Chinese stocks jumped Monday after authorities loosened controls on brokerages lending money to investors for share buying, while other Asian and European benchmarks drifted as concerns about global growth and lower oil prices weighed on sentiment.
European stocks opened lower, with Germany’s DAX losing 0.2 percent to 9,929.51, while France’s CAC 40 shed 0.5 percent to 4,439.33. Britain’s FTSE 100 dipped less than 0.1 percent to 6,185.01.
U.S. markets looked set for a tepid open, with both Dow and S&P 500 futures unchanged.
The Shanghai Composite Index in mainland China soared 2.2 percent to close at 3,018.80. South Korea’s benchmark Kospi index slipped 0.1 percent to end at 1,989.76, while Hong Kong’s Hang Seng index was up 0.1 percent to 20,684.15. Australia’s S&P/ASX 200 dipped 0.3 percent to 5,166.50. Southeast Asian benchmarks were uneven. Markets in Japan were closed for a holiday.
China Securities Finance Corp. said late Friday that it would resume providing financing to stock brokerages lending money to investors, in a move seen as providing support for the country’s fluctuating markets. The state-owned institution said it would provide margin financing again for four different loan periods of up to 91 days, according to a statement that was no longer available on its website but circulated widely on Chinese media. It also started publishing interest rates for the loans on its websites and lowered the rate for a longer-term loan. Beijing had tightened limits late last year on margin financing as it wound down emergency measures aimed at halting a market meltdown that began last June.
“They had restricted financing for a while, and now they’re relaxing the rules, which is good, because recently Chinese market turnover had been on the low side for a very long time,” said Jackson Wong, associate director at Huarong International Securities. “By relaxing rules, that would definitely boost the sentiment, the turnover.”
The weakening price of oil and concerns about the state of China’s economy continue to weigh on the minds of investors as they evaluate global growth prospects. Investors will also be mulling the outlook for the U.S. economy this week after Fed officials said last week that they would slow the rate of interest rate increases this year because of concerns about the global economy. Trading in many major markets is expected to be quieter than usual this week because trading is shortened not only by the Japanese holiday but also the Good Friday holiday in Western countries.
Benchmark U.S. crude extended losses, sliding 56 cents, or 1.4 percent, to $40.58 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 76 cents, or 1.9 percent, to settle at $39.44 a barrel. Brent crude, the benchmark for international oils, gave up 47 cents to $40.73 a barrel in London.
The dollar dipped to 111.39 yen from 111.56 in late trading Friday. The euro weakened to $1.1258 from $1.1268.