Investing.com - Asian stocks continued to fall in afternoon trade on Monday as China’s markets reopened after a week-long holiday. The People’s Bank of China announced on Sunday that it lowered the required reserve ratio (RRR) for some lenders by 1%, although its impact on local equities seemed to be limited.
The cut will become effective from Oct 15, according to a statement on the central bank’s website.
A total of 1.2 trillion yuan ($175 billion) would be released, of which 450 billion yuan is to be used to repay existing medium-term funding facilities, the central bank said.
Despite the news, the Shanghai Composite and the Shenzhen Component plunged 2.8 and 3.2% respectively by 1:52AM ET (05:42 GMT). Hong Kong’s Hang Seng Index also fell 0.7%.
The Caixin/Markit services purchasing managers' index (PMI) rose to 53.1 in September from 51.5 in August, data showed on Monday. The index stayed above the 50 level that separates growth from contraction.
An official gauge of the non-manufacturing sector for last month published on Sept 30 also pointed to continued expansion.
Hong Kong-listed Lenovo Group (HK:0992) further dropped 1.6% on Monday after tumbling as much as 20% on Friday after a Bloomberg report showed that Chinese spies inserted computer chips in some U.S. companies’ system.
Bloomberg Businessweek cited 17 undisclosed sources and reported that Chinese spies placed computer chips inside equipment used by about 30 computers and a few U.S. government agencies, allegedly giving Beijing access to internal networks.
Share prices of the Chinese telecommunications goods maker plunged following the report, even after Apple (NASDAQ:AAPL) and Amazon.com (NASDAQ:AMZN) denied the report. Lenovo said in a statement that SuperMicro, cited in the Bloomberg report as the supplier of the chips, is not a supplier to the company.
Meanwhile, South Korea’s KOSPI slipped 0.2% as U.S. President Donald Trump said he hopes to see his North Korean counterpart Kim Jong Un “in the near future”. His comments came U.S. Secretary of State Michael Pompeo’s meeting with North Korean leader Kim Jong Un in Pyongyang over the weekend.
Pompeo told South Korean President Moon Jae-in upon his arrival in Seoul that Kim had agreed to meet with Trump “as soon as possible,” according to a statement from Moon’s office.
“As President Trump said, there are many steps along the way and we took one of them today,” Pompeo told Moon in Seoul. “It was another step forward.”
Down under, Australia’s ASX 200 also traded 1.4% lower, with shares of Australia and New Zealand Banking Group Ltd (NZ:ANZ) (ANZ) dropping 2.2% after the company announced that its full year 2018 cash profit would be "impacted by additional charges for customer compensation, accelerated amortisation of software and other notable items."
Japan’s Nikkei 225 is closed for a holiday.