Chinese shares surge after targeted RRR cuts

Chinese shares climbed more than 1 percent on Tuesday after the central bank announced details of targeted cuts to the reserve requirement ratio (RRR) for some commercial banks.

The benchmark Shanghai Composite Index rose 22.03 points, or 1.08 percent, to finish at 2,052.53. The Shenzhen Component Index climbed 114.42 points, or 1.58 percent, to close at 7,341.66.

Combined turnover reached 187.74 billion yuan (30.55 billion U.S. dollars) from 134.88 billion yuan on the previous trading day.

The People's Bank of China said Monday that it would cut RRR by 0.5 percentage points for banks engaged in proportionate lending to agricultural and small firms starting June 16.

The statement provided details following a cabinet decision late last month to launch narrow-based RRR cuts for banks engaged in lending to agriculture, small and micro companies.

Banking sector was among the strongest gainers on Tuesday, with the sub-index up 1.8 percent.

Industrial and Commercial Bank of China, the country's largest commercial bank by market value, rose 1.91 percent to 3.73 yuan per share, while Agricultural Bank of China gained 1.19 percent to 2.55 yuan.

Other market heavyweights mostly saw strong gains. Sinopec, the country's largest oil refiner, climbed 1.79 percent to 5.11 yuan. Poly Real Estate, a major property developer, soared 2.53 percent to 5.27 yuan.