China stocks closed lower on Wednesday after the central bank surprisingly kept its benchmark lending rates unchanged, despite frequent government pledges to support a slowing economy hit by the worst COVID-19 outbreak in two years.
** The blue-chip CSI300 index fell 1.6%, to 4,070.79, while the Shanghai Composite Index lost 1.4% to 3,151.05 points.
** The one-year loan prime rate (LPR) was kept at 3.70% and the five-year LPR was unchanged at 4.60%, which markets see as Beijing's cautious approach to rolling out more easing measures.
** "Due to limited space on cutting RRR (reserve requirement ratio) and rates, Beijing will increasingly focus on credit easing, especially on the local government financing and the property sector, the two conventional growth drivers," Nomura said in a note.
** China will step up financial support for technology innovation and ensure the security and stability of its supply chains, State TV cited a meeting chaired by President Xi Jinping as saying.
** China's central bank urged financial institutions to step up support for the contact-intensive service sector and small firms impacted by COVID-19, and vowed to keep property sector financing stable and orderly.
** Consumer staples edged up 0.5% and tourism firms gained 1.4%, while real estate developers slumped 5.8%.
** Energy and machinery stocks fell 4.8% and 3.8%, respectively. New energy shares fell 4%, with battery giant Contemporary Amperex Technology Co (CATL) slumping 7.6% to nearly 11-month lows.
** If lockdowns in China cause further disruptions to global supply chains, the Federal Reserve will need to take even more aggressive action to bring down "much too high" inflation, Minneapolis Fed President said.
** Mainland China reported 19,927 new COVID-19 cases for April 19, down from 21,600 new cases a day earlier.
** Shanghai reported on Wednesday no new cases of COVID-19 outside quarantined areas in two districts, raising hopes that the tide was turning in its battle against the epidemic, with some factories around the city making a gradual return to work.
(Reporting by Shanghai Newsroom; editing by Uttaresh.V)