Financial markets mixed at end of trading

China’s financial markets were mixed at the end of trading on Tuesday, with a lack of investor enthusiasm.

Boosted by overnight gains on Wall Street, A-share markets opened higher. The benchmark Shanghai Composite Index inched up 0.2 percent, ending the day’s trading session at 2,921.40 points.

The smaller Shenzhen Component Index was 0.09 percent higher at around 11,112.50 points, while the ChiNext Index fell 0.60 percent to finish on 2,145.29.

Combined turnover of the two bourses was 772.1 billion yuan (US$108.4 billion), compared with the previous trading day’s 761.5 billion yuan.

Encouraged by a plan unveiled by Chinese authorities on Monday for the Hainan free trade port, related stocks advanced.

A free trade port system focusing on trade and investment liberalization and facilitation will be established in Hainan by 2025 and become more mature by 2035, according to the plan issued by the Central Committee of the Communist Party of China and the State Council.

Hainan Haide Industry Co Ltd, a company principally engaged in the development, sales, management and leasing of real estate, saw its shares jump by the daily maximum of 10 percent to close at 13.84 yuan per share.

In response to Beijing’s call for a further extension of small business loans and the creation of new monetary policy tools to support small companies during the National People’s Congress, the People’s Bank of China, together with four ministries including the Ministry of Finance, announced two credit easing measures on Monday to support bank lending to small businesses.

Some 400 billion yuan will be used for purchasing qualifying credit loans directly from small banks, and another 40 billion yuan will be allocated to set up a special purpose vehicle to help extend as much as 3.7 trillion yuan in loans to small businesses.

These two credit easing programs should boost both money supply and credit growth, according to Nomura’s global markets research note.

The investment bank believes Beijing has recognized the elevated downward pressure on job markets, especially for small businesses, and may further ramp up policy support to stabilize employment.