The People’s Bank of China (PBOC) said that the reserve requirement ratios (RRRs) - currently 15.5 percent for large commercial lenders and 13.5 percent for smaller banks - would be cut by 100 basis points effective October 15, matching a similar-sized move in April.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3 percent.
On Friday, the Dow Jones Industrial Average fell 180.43 points, or 0.68 percent, to 26,447.05, the S&P 500 lost 16.04 points, or 0.55 percent, to 2,885.57. The Nasdaq Composite dropped 91.06 points, or 1.16 percent, to 7,788.45, marking its first weekly percentage decline since March.
“It is possible for the Hong Kong and Shanghai stock markets to recover from recent losses if investors can derive optimism based on the change to monetary policy,” Jonathen Chan, a market analyst at CMC Markets and Stockbroking, said in a note, according to a Reuters report.
“Expectations of a weaker Chinese yuan may help to lift market sentiment as well,” he said.
Middle East markets
Gulf stock markets dropped on Sunday as global markets across the world ended the week lower.
The Saudi index lost 1.3 percent with the petrochemical sector weighing on the index.
Advanced Petrochemical dropped 2.8 percent after reporting a slight decline in quarterly net income to 202 million riyals ($53.86 million). Saudi Kayan Petrochemical Company was among the worst performers, dropping 4.4 percent. Saudi Basic Industries Corporation lost 1.6 percent.
Dubai’s index ended the day mostly unchanged. Drake and Scull International added 2.93 percent after saying on Sunday that the majority of its shareholders approved the company continuing its business at a general assembly on Thursday.
In Abu Dhabi the index shed 0.3 percent, pulled down the day's most active stock, Dana Gas, which lost 1.7 percent.
Qatar’s index dropped 0.6 percent, Bahrain’s index edged down 0.1 percent while Kuwait’s index dropped 0.2 percent and Oman’s index fell 0.2 percent.
Egypt’s index was closed for a public holiday.
Oil prices dropped on Monday after last week’s rally.
International benchmark Brent crude oil futures were at $83.25 per barrel at 0115 GMT, down 91 cents, or 1.1 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were down 57 cents, or 0.8 percent, at $73.77 a barrel.
The dollar edged up in early trading on Monday.
Against a basket of currencies, the dollar was a fraction firmer at 95.682 after hitting a six-week top at 96.121 last week.
The dollar inched ahead to 113.90 yen after topping out at 114.55 last week.
Gold prices retreated on a stronger dollar.
Spot gold was down 0.2 percent at $1,200.31 an ounce at 0103 GMT. It gained 0.9 percent last week.
U.S. gold futures fell 0.1 percent to $1,204.40 an ounce.
(Writing by Gerard Aoun; Editing by Mily Chakrabarty)
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