China Stocks Slip as Rate Cut Fails to Convince Investors

China’s turbulent stock markets slipped again on Wednesday, as a double-barrelled blast of central bank stimulus failed to convince investors of Beijing’s ability to jolt the world’s second biggest economy out of its slowdown.

After watching share prices tumble around 25 percent in a little more than a week, the People’s Bank of China re-entered the fray late on Tuesday, cutting interest rates and further loosening bank lending restrictions.

The response from China’s two main stock indexes – never reliable barometers of the domestic economy – was typically erratic, lurching between gains and losses of more than 3 percent before ending the day modestly lower.

European markets had risen sharply immediately after the People’s Bank of China’s move on Tuesday, but U.S. indexes turned negative after an initial leap, setting the tone for a lacklustre session in Asia on Wednesday.

Reuters

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.