China stocks move sideways on rate cut disappointment; ICBC hits record on dividend appeal

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ICBC, Bank of China and China Construction Bank hit record highs as falling government bond yields boost the appeal of dividend-paying stocks

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Women walk past by a display showing the Shanghai stock market index. Photo: AP Photo

Zhang Shidongin Shanghai

Published: 10:38am, 25 Dec 2024Updated: 3:36pm, 25 Dec 2024

Mainland Chinese stocks barely budged, as the central bank refrained from cutting a key policy interest rate. Investors piled into Industrial and Commercial Bank of China (ICBC) and other high-dividend stocks amid falling bond yields, driving share prices to all-time highs.

The broad-based CSI 300 Index rose 0.1 per cent to 3,985.63 at the close, near a two-week high. The Shanghai Composite Index fell less than 0.1 per cent.

Hong Kong’s market is closed up to Thursday for the Christmas holiday.

ICBC and other big state-owned lenders refreshed new highs after a rapid decline in government bonds yields boosted the appeal of high-dividend stocks. Energy and financial stocks were the best-performing sectors on the CSI 300, while material and consumer-discretionary companies declined the most.

The People’s Bank of China left a key policy rate unchanged on Wednesday. Photo: Reuters

The People’s Bank of China (PBOC) kept the interest rate on its one-year medium-term lending facility, a funding tool for commercial lenders, at 2 per cent, indicating China’s reservation to ease policy further before potential new tariffs by the incoming Trump administration. At the same time, the PBOC drained a net 1.15 trillion yuan (US$158 billion) from the financial system through the facility, the most since 2014.