Asia report: Cheaper margin loans see China leap ahead

Stocks in China leapt higher on Monday amid mixed trading in Asia, after Beijing indicated it wanted to make borrowing to buy shares easier.

The Shanghai Composite Index was pushed higher by a surge in brokerage notes, closing up 2.15% at 3,018.80 - the first time it's been above 3,000 since January. The Shenzhen Composite was up 2,68% at 1,886.37.

Shares in the country's biggest broker - Citic Securities Co - were up by the 10% daily limit set by the authorities. Dongxing Securities, Huatai Securities and Haitong Securities also surged.

The enthusiasm in securities was stoked after the state-backed China Securities Finance Corporation published new interest rates on loans it gives to brokerages, lowering 182-day loans to 3% from 4.8%, offering more support for investors.

“The CSF isn’t obliged to disclose their rates move in the first place so it’s more of an attempt to provide the market with a dose of confidence,” said Guotai Junan Securities analyst Zhang Xin.

While the interest rate drop was widely reported, the release was quickly removed from the CSF's website, and officials declined to talk to media on the issue. Margin loans were said to play a large part in the crash of China's markets last summer.

Shares elsewhere in the region were mixed, with the economic data calendar light compared with last week. A decline in oil prices did drag energy stocks, which were down 1% in Australia and 0.9% in Hong Kong.

Oil prices were mixed after Asian trading. Brent crude was last up 0.22% to $41.29 per barrel, and West Texas Intermediate was down 0.37% at $40.99.

Australia's S&P/ASX 200 was down 0.32%, while the Kospi in Seoul was down 0.1%. The Hang Seng Index finished up 0.1% for the day, while traders in Tokyo took the day off for equinox day.

New Zealand shares continued their record ascent, with the S&P/NZX 50 up 0.3% to a fresh record high of 6,641.94. The benchmark had gained 9% in the last month and was starting to look overvalued compared to its earnings outlook

In currencies, the People's Bank guided renminbi weaker by 0.3% to CNY 6.4824 per USD - the biggest single-day weakening since 7 January.

It was noted by analysts that the daily loose peg of the onshore yuan had become more dynamic recently, moving in line with other currencies the central bank trades with. It had guided it 0.5% stronger on Friday.

The yen saw choppy trading through the day, but was last 0.04% stronger on the greenback at JPY 111.51 per dollar. The Aussie saw sharp gains towards the end of the Asian day, and was last 0.17% stronger at AUD 1.3121 per dollar, while the Kiwi lost some of its earlier strength and was trading 0.12% weaker at NZD 1.4735 per dollar.