Stocks Fell as China Reduced Its Benchmark Lending Rate

Stocks in Asia-Pacific declined on December 20, as China reduced its benchmark lending rate for the first time in more than one-and-a-half years.

In Japan, the Nikkei 225 dropped 2.13% to end its trading day at 27,937.81. The Topix index fell 2.17% to 1,941.33.

In South Korea, Kospi dropped 1.81% to finish its trading at 2,963.

In India, the Nifty 50, as well as the BSE Sensex, declined nearly 3% each, as of 12:43 p.m. local time.

Australian stocks suffered losses, with the S&P/ASX 200 down 0.16% to 7,292.20.

Mainland Chinese stocks on December 20

Mainland Chinese stocks fell on December 20. The Shanghai composite dropped 1.07% to 3,593.60. The Shenzhen component fell 2.007% to end its trading day at 14,569.18.

In Hong Kong, the Hang Seng index dropped about 2%, as of its final hour of trading.

On December 20, China’s central bank cut a benchmark lending rate for the first time since April 2020. The central bank lowered the one-year loan prime rate to 3.8%, down from 3.85%. The People’s Bank of China made the decision not to change the five-year loan prime rate. The loan prime rate (LPR) affects lending rates for corporate as well as household loans.

U.S. stocks on December 17

Last week, specifically on December 17, the Dow Jones Industrial Average fell 532.20 points or 1.5% to 35,365.44. On the same day, the S&P 500 dropped 1% to 4,620.64. The Nasdaq Composite declined less than 0.1% to 15,169.68.

All of them posted a negative week with the Nasdaq being the biggest loser. It plunged nearly 3%. The Dow Jones Industrial Average dropped 1.7% and the S&P 500 fell 1.9%.