Hang Seng index daily chart

Hong Kong's main stock index is now up over 3% on the day and rallying into the closing stages, after the Chinese central bank announced the first RRR cut of the year here. It is a bigger one this time around as well as the reduction is 50 bps, as opposed to the two 25 bps cuts performed in March and September last year.

Risk assets in general are feeling more buoyant now as we look towards European trading, with S&P 500 futures also rising by 0.4% on the day. In turn, the dollar is losing some ground with USD/JPY now down 0.4% to 147.70 and EUR/USD up 0.2% to 1.0875 currently.

Going back to Chinese equities, is this the start of a major turnaround? Or is it merely a dead cat bounce? That's a really tough question for investors to make sense of at the moment. I mean, this 50 bps RRR cut isn't quite the supposed $278 billion rescue package touted here yesterday.