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Shanghai Composite hits three-year high

FXStreet (Mumbai) - The Chinese stock markets rose to a three-year high today as markets showed their appreciation towards a surprise interest rate cut announced on Friday.

The Shanghai Composite traded 1.37% higher at 2567 levels at the time of writing. Market interest rates fell, with the benchmark seven-day repurchase rate, retreating 3.18% from the Friday’s close. Mainland shares hit its second consecutive three-year high today, led by a rally in media firms. Bestv New Media and Shanghai Oriental Pearl surged 10% after announcing a merger yesterday.

Moreover, the Chinese stocks rallied after the People’s Bank of China (PBoC) announced a surprise cut of 25 bps in the benchmark interest rate. Meanwhile, Hong Kong's Hang Seng Index erased gains to trade marginally in the red.

Shanghai Composite Technical Levels

The index has an immediate resistance at 2584 (Sep 2011 high), above which the prices can rise to 2688 levels (May 2009 high). Meanwhile, support is seen at 2508 and 2437 levels.

Stronger than expected IFO survey offers some support to the EUR – BTMU

Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, observes that the euro derived some support form the IFO release yesterday as it strengthened modestly to rise above 1.2400 levels post last week’s sell-off.
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