China A-shares end morning higher on rate cut hopes

China A-shares finished the morning higher on hopes for further Chinese interest rate cuts after the US Federal Reserve slashed its benchmark rate to near zero overnight, dealers said.

Property developers posted gains in line with the broad market. The sector rose sharply yesterday after central bank governor Zhou Xiaochuan said in Hong Kong that China will face continued pressure to cut interest rates in the near term.

Nonferrous metal stocks led the advance, while brokers underperformed after a report that a trial margin trading and short selling program may be postponed.

The benchmark Shanghai Composite Index ended the morning up 24.92 points or 1.26 pct at 1,999.93.

'Overall sentiment was boosted by hopes that China may follow the US rate cut to further ease borrowing costs,' said Cao Yan, an analyst with Soochow Securities.

The central bank has cut interest rates four times since September as it shifted its monetary policy stance to 'appropriately loose' from an implicitly tight bias.

'In addition to the monetary loosening, support measures aiding companies such as property developers, nonferrous metal producers, and power firms are expected to be announced as soon as early next year,' said Wu Dazhong, an analyst with Guotai Junan Securities.

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