Chinese Stocks Defy Biden's Auto Import Ban Concerns, Rally To 4-Month Highs As Central Bank Unexpectedly Slashes Interest Rates

Chinese stocks surged to their highest levels in four months on Monday, following the People’s Bank of China’s (PBoC) slashing a key interest rate.

The surprise move reignites hopes for additional stimulus in the world’s second-largest economy.

The iShares China Large-Cap ETF (NYSE:FXI), which tracks major Chinese firms like Alibaba Group Holding Limited (NYSE:BABA), Tencent Holding Ltd. (OTCPK: TCEHY), JD.com Inc. (NASDAQ:JD), and Baidu Inc. (NYSE:BIDU), is up more than 2% as of 11:20 a.m. ET in New York. It’s a level not seen since late May.

PBoC Cuts Rates, Inject Liquidity

On Sept. 23, the People’s Bank of China unexpectedly reduced the 14-day reverse repurchase rate by 10 basis points to 1.85%, down from 1.95%.

Additionally, the ...