The move comes amid a deepening trade spat between China and the United States, which threatens to worsen the former’s economic slowdown.
The measures, including a tax cut aimed at fostering research spending to special bonds for infrastructure investment, were announced late on Monday following a meeting of the State Council in Beijing.
News of the package buoyed investors, who had been concerned about the outlook of the China’s economic growth for the second half of 2018.
Copper was the outperformer of the SHFE base metals complex this morning, with the metal’s most-traded September contract rising to 50,040 yuan ($7,357) per tonne as at 9.49am Shanghai time, up by 730 yuan per tonne or 1.5% from Tuesday’s close.
“Copper was also supported by further reports that Escondida unions are set to reject the upcoming revised offer from management, which will likely lead to strike action next week,” ANZ Research noted on Wednesday.
“Meanwhile, at Antofagasta’s Los Pelambres copper mine, access roads remain blocked for the fifth consecutive day as local communities protest about pollution,” it added.
Base metals push higher
- The SHFE September copper contract climbed 730 yuan per tonne to 50,040 yuan per tonne.
- The SHFE September aluminium contract rose 65 yuan per tonne to 14,400 yuan per tonne.
- The SHFE September zinc contract increased 175 yuan per tonne to 21,490 yuan per tonne.
- The SHFE September lead contract moved up 145 yuan per tonne to 18,720yuan per tonne.
- The SHFE September tin contract jumped 1,420 yuan per tonne to 111,490 yuan per tonne.
- The SHFE September nickel contract climbed 1,540 yuan per tonne to 111,100 yuan per tonne.
Currency moves and data releases
- The dollar index was down by 0.03% at 94.58 as at 9:50 am Shanghai time.
- In other commodities, Brent crude oil was up by 0.1% at $73.8 per barrel as at 9:50am Shanghai time.
- In equities, the Shanghai Composite increased 0.06% to 2907.72 as of 11.20 am Shanghai time.
- In US data on Tuesday, the house price index rose 0.2% in May, falling short of an expected 0.4% increase. The flash manufacturing purchasing managers’ index (PMI) at 55.5 was above the forecast 55.1 print, while the Richmond Manufacturing Index also surprised to the upside with a reading of 20 – 18 had been called for. The flash services PMI, however, missed to the downside with a reading of 56.2, compared with an expected print of 56.5.
- The economic agenda is fairly light today with German Ifo business climate and the European Union’s M3 money supply and private loans of note. US data includes new home sales and crude oil inventories.
