ASX200 ends up 0.8% after China's liquidity boost

Australian shares rose strongly on light volume after China's liquidity boost late Friday boosted global markets and investors brushed off Sydney's worsening Covid outbreak and the prospect of an extended lockdown.

Wall Street provided a strong lead for the Australian sharemarket. Picture: Jeremy Piper

Welcome to the Trading Day blog for Monday, July 12. The ASX 200 rose strongly at the open with BHP lifting 3.5%.  It followed US records and commodity price rises. The benchmark Australian index was drifting lower into the afternoon.

Base metals finished higher on Friday after the People’s Bank of China (PBoC) cut its required reserve ratio (RRR) by 50bps from July 15. CBA noted that the PBoC said the RRR cut did not imply a shift in monetary policy.

"The move is to optimise liquidity injection within the banking system and support small businesses. The PBoC’s move to cut the RRR suggests the sharp deceleration in credit growth might come to an end."

Originally published as ASX200 ends up 0.8% after China's liquidity boost

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