Asian stocks down despite Chinese stimulus

Trading sentiment was dampened by Chinese regulatory curbs on speculative trading.

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By :  ,  Financial Analyst

Asian stocks were down today (April 20th) as China implanted regulatory curbs on speculative trading.

On Friday, the China Securities Regulatory Commission banned the margin trading businesses of brokerages from taking part in umbrella trusts, which allow investors to take on more leverage, Bloomberg reports.

The move dampened investor's sentiment, even though China's central bank lowered the reserve requirement ratio (RRR) for all banks by one percentage point over the weekend in a bid to stimulate lending into the sluggish economy. 

Chinese newspaper People's Daily said the cut is expected to release 1.2 trillion yuan (£130 billion) into the country's economy. 

"The RRR cut attempted to put a calm on markets after Friday's news, but the magnitude of the cut was more than what the market priced in," Catherine Yeung, investment director at Fidelity Worldwide Investment, told CNBC Asia's "Squawk Box."

The Shanghai Composite tumbled 1.6 per cent to 4218.12 after rising about one per cent in early trading. Japan's Nikkei 225 lost 0.1 per cent at 19,634.49. Hong Kong's Hang Seng sank two per cent to 27094.93 while South Korea's Kospi added 0.2 per cent to 2,146.71.

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