Although the index closed higher on Friday, it slid nearly 4.8% last week. It was Hang Seng's biggest weekly decline since August. The city is shaken by violent protests that have escalated in recent days.
Suffering and the local economy. The Hong Kong government warned on Friday that mass protests could shrink the economy by 1.3% this year, marking the first annual recession since 2009.
This is another sign that the central bank is "beginning to take a more proactive approach" to reducing borrowing costs to support economic growth, said Julian Evans-Prichard, a senior Chinese economist in capital economics.
Monday's move could encourage banks to lower their base rate of credit on Wednesday, as bank financing costs are lower, he wrote in a research note. LPR is the interest rate that banks charge corporate customers for new loans. This is a new lending criterion that China introduced in August and hopes to gradually replace the existing fixed interest rate benchmark.
In other areas, markets were relatively muted. The Japanese Nikkei 225 ( N225 ) gained 0.3%. South Korea's Kospi Index ( KOSPI ) however, slipped 0.3%.
Investors may look for more trading news. Wall Street's major indices closed in green on Friday in part because of trade optimism between the US and China. Over the weekend, the Chinese Ministry of Commerce said the Chinese and US negotiators had a "constructive discussion" about phase one of the deal.
SoftBank ( SFTBF ) announced on Monday a plan to merge its Z Holdings unit before Yahoo Japan with Line Corp messaging operator in 2020.
Z Holdings ( YAHOY )
and Line Corp ( LN )
increased by 1
.2% and 2.2, respectively. % each in Tokyo.
US futures, meanwhile, are slightly retreating on Asian trading hours on Monday. Futures for Dow ( INDU ) S&P 500 ( SPX ) and Nasdaq (19459011] COMP ) have all been reduced.