China stocks end firmer ahead of key rate decision
The blue-chip CSI300 index rose 0.4 per cent, to 3,924.38
The blue-chip CSI300 index rose 0.4 per cent, to 3,924.38, while the Shanghai Composite Index added 0.5 per cent to 2,999.28 points.
The Fed cut interest rates again on Wednesday to help sustain a record-long economic expansion but signalled a higher bar to further reductions in borrowing costs.
Market participants are now watching closely if and to what extent China would lower its new lending reference rate on Friday following the Fed's move.
Analysts believe the Fed's rate cuts and the easing by the European central bank allow China more leeway for further monetary easing.
China trimmed the revamped Loan Prime Rate (LPR) on Aug. 20, as the central bank kicked off interest rate reforms designed to reduce corporate borrowing costs in the world's second-largest economy.
"China is rather likely to further lower the LPR tomorrow, but it's hard for now to predict the exact basis points of the cut," Shen Xinfeng, an analyst with Northeast Securities said.
There are still some restrictions for China's interest rate changes due to relatively high inflationary pressure this year, especially from soaring pork prices, Shen added.
Wang Yifeng, an analyst with Everbright Securities, expected a gradual and phased path of cuts, saying the LPR would be lowered on Friday by 5-10 basis points, with a further cut of 5-10 basis points in November.
Tech firms, seen among the biggest beneficiaries of lower funding costs, led the gains on Thursday. The tech-heavy start-up board ChiNextP closed 1.6 per cent higher.
Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.58 per cent, while Japan's Nikkei index closed up 0.38 per cent.
At 0716 GMT, the yuan was quoted at 7.1042 per US dollar, 0.24 per cent weaker than the previous close of 7.087.
The largest percentage gainers in the main Shanghai Composite index were Shanghai Feilo Acoustics Co Ltd , up 10.12 per cent, followed by CSD Water Service Co Ltd , gaining 10.04 per cent and Ningbo Tianlong Electronics Co Ltd, up by 10.04 per cent.
The largest percentage losses in the Shanghai index were Zhejiang Guangsha Co Ltd down 7.69 per cent, followed by Jiangsu Shemar Electric Co Ltd losing 7.38 per cent and Shanghai Environment Group Co Ltd down by 5.77 per cent.
As of 0716 GMT, China's A-shares were trading at a premium of 29.70 per cent over the Hong Kong-listed H-shares.