This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/business-34059482
The article has changed 12 times. There is an RSS feed of changes available.
| Version 7 | Version 8 |
|---|---|
| China market slump: Shares end lower despite rate cut | China market slump: Shares end lower despite rate cut |
| (35 minutes later) | |
| Chinese shares have closed lower despite a fresh rate cut by the central bank. | Chinese shares have closed lower despite a fresh rate cut by the central bank. |
| The mainland's benchmark Shanghai Composite fell 1.27% to 2,927.29, after veering in and out of negative territory. | The mainland's benchmark Shanghai Composite fell 1.27% to 2,927.29, after veering in and out of negative territory. |
| It had fallen about 16% this week, rocking global markets. | It had fallen about 16% this week, rocking global markets. |
| On Tuesday, China's central bank cut its key lending rate by 0.25 percentage points to 4.6% in a bid to calm stock markets after the past days' turmoil. | On Tuesday, China's central bank cut its key lending rate by 0.25 percentage points to 4.6% in a bid to calm stock markets after the past days' turmoil. |
| The dramatic losses and volatility in China have shattered investor confidence and led to sharp falls in Asia and the US over the past days. | The dramatic losses and volatility in China have shattered investor confidence and led to sharp falls in Asia and the US over the past days. |
| European markets were down by about 1.5% in early trading on Wednesday, after rallying on Tuesday. | |
| The interest rate cut was the fifth by the People's Bank of China since November last year. | The interest rate cut was the fifth by the People's Bank of China since November last year. |
| A rate cut will make it cheaper for banks to borrow from the central bank and will in turn make it easier for businesses and private people to borrow money from those banks. | A rate cut will make it cheaper for banks to borrow from the central bank and will in turn make it easier for businesses and private people to borrow money from those banks. |
| Analysis: Robert Peston, BBC business editor | |
| In some ways I thought yesterday's events on markets were if anything more disturbing than Monday's global rout. | |
| Because if share-price gains could not hold after the significant monetary easing by China's central bank, then mistrust about the true state of the world's second largest economy (actually the number-one economy on the purchasing-power-parity measure of GDP) has become very pronounced indeed. | |
| And another thing, the Chinese interest rate cuts will exacerbate the phenomenon that has caused so much stress in so many different global markets, from commodities, to foreign exchange, to stocks and bond - the fall in the Chinese currency, the RMB, since it was allowed by Beijing to float more freely on 11 August. | |
| Read more from our experts: | |
| Robert Peston: China's woes and a still flawed global economy | |
| Duncan Weldon: What next for the global economy after China market woes? | |
| Andrew Walker: How the China share slump affects the rest of the world | |
| Karishma Vaswani: China counts cost of Black Monday | |
| The BBC's Celia Hatton in Beijing explains that the move is aimed at a long-term effect on the growth of the Chinese economy, rather than at having an immediate impact on investors. | The BBC's Celia Hatton in Beijing explains that the move is aimed at a long-term effect on the growth of the Chinese economy, rather than at having an immediate impact on investors. |
| "They've already said they are not going to intervene on a day-to-day basis in the stock market, but they are going to focus their attention on growing the real economy in the long term." | "They've already said they are not going to intervene on a day-to-day basis in the stock market, but they are going to focus their attention on growing the real economy in the long term." |
| "They hope that this will convince investors that the Chinese economy might be slowing down, but is not in for a hard landing, and that this will over time convince investors and stabilise the market," our correspondent said. | "They hope that this will convince investors that the Chinese economy might be slowing down, but is not in for a hard landing, and that this will over time convince investors and stabilise the market," our correspondent said. |
| Hong Kong's Hang Seng index followed Shanghai's lead for most of the morning, but then traded flat at 21,416.09 points. | Hong Kong's Hang Seng index followed Shanghai's lead for most of the morning, but then traded flat at 21,416.09 points. |
| Analysis: Carrie Gracie, BBC News China editor | Analysis: Carrie Gracie, BBC News China editor |
| The deeper problem is that now the year-long stock bubble has burst, investors are confronting the economic fundamentals. | The deeper problem is that now the year-long stock bubble has burst, investors are confronting the economic fundamentals. |
| China has embarked on a huge transition away from its previous investment-led growth model, and although the government warned that transition would be painful, the pain is already far worse than it bargained for, undermining the credibility of its 7% growth target and deepening political unease. | China has embarked on a huge transition away from its previous investment-led growth model, and although the government warned that transition would be painful, the pain is already far worse than it bargained for, undermining the credibility of its 7% growth target and deepening political unease. |
| A dramatic devaluation of the currency a fortnight ago, coming on top of the summer's bungled stock market rescue, has left Beijing looking uncertain and accident prone. | A dramatic devaluation of the currency a fortnight ago, coming on top of the summer's bungled stock market rescue, has left Beijing looking uncertain and accident prone. |
| The stock market may well have further to fall. | The stock market may well have further to fall. |
| Given China's central role in world trade, a slowdown in the world's second-largest economy would be likely to reverberate around the globe. | Given China's central role in world trade, a slowdown in the world's second-largest economy would be likely to reverberate around the globe. |
| Read more: The six Cs of the China stock slump | Read more: The six Cs of the China stock slump |
| The stocks fall in facial expressions | The stocks fall in facial expressions |
| Optimism elsewhere | Optimism elsewhere |
| Elsewhere in Asia, the region's largest index, Japan's Nikkei 225 finished 3.2% higher on Wednesday at 18,376.83 points. | Elsewhere in Asia, the region's largest index, Japan's Nikkei 225 finished 3.2% higher on Wednesday at 18,376.83 points. |
| The Nikkei's gains come after a painful week for the Tokyo index, which had shed more than 8% in the past two sessions. | The Nikkei's gains come after a painful week for the Tokyo index, which had shed more than 8% in the past two sessions. |
| South Korea's Kospi index was also in positive territory, closing 2.6% higher at 1,894.29 points, while in Australia, the S&P/ASX 200 finished 0.7% up at 5,172.80. | South Korea's Kospi index was also in positive territory, closing 2.6% higher at 1,894.29 points, while in Australia, the S&P/ASX 200 finished 0.7% up at 5,172.80. |
| Overnight, European and US markets saw another session of volatile trading. | Overnight, European and US markets saw another session of volatile trading. |