The Shanghai Composite Index, a benchmark of Chinese A shares, went up 0.69% to close at 2,736.02 points on Thursday, amid a wider rebound of emerging market stocks. Following the trend, the MSCI index for emerging markets surged 1.09% on Thursday evening.
Meanwhile, the Chinese yuan strengthened by 293 basis points in the onshore market to 7.06 against the US dollar on Thursday. This is its strongest level since June 2023.
Analysts said a major driver of the rebounds was the US Fed’s rate cut on Wednesday, which signals that the US has entered its first post-COVID monetary easing cycle. This will make the financial assets of emerging market economies more attractive than before.
On Wednesday, the US Fed slashed interest rates by 50 basis points and sent its target interest rate range to 4.75-5% amid easing inflation and a weakening labor market.
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