Short-lived Recovery
- China stock markets end lower after a volatile day
- Benchmark indices swung more than 3% in both directions
- The wild swings show that trader confidence is still fragile
China’s fresh monetary easing triggered stock market volatility on Wednesday, with key indexes ending down for a fifth straight session after swinging more than 3% in both directions in extreme volatility.
A sharp mid-session rebound following a deep correction in early morning invited selling in the late afternoon, which only went on to show the fragile confidence and deep doubt over whether the central bank’s overnight cuts in interest rates and reserve ratios could stabilise the economy.
The CSI300 blue-chip index of the largest listed companies in Shanghai and Shenzhen ended down 0.6%, while the Shanghai Composite Index lost 1.3%.
Both indexes hit fresh eight-month lows, and have lost over 20% in just five trading sessions.
The People’s Bank of China late Tuesday cut interest rates and lowered the amount of reserves banks must hold for the second time in two months, in an apparent move to aid the economy and the slumping stock market.
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