Arab Today, arab today nervous markets ride rollercoaster after china rate cut
Last Updated : GMT 13:11:41
Arab Today, arab today
Arab Today, arab today

Nervous markets ride roller-coaster after China rate cut

Arab Today, arab today

Arab Today, arab today Nervous markets ride roller-coaster after China rate cut

Asian markets
Shanghai - AFP

European markets joined Asia on a roller-coaster session Wednesday, as China's interest rate cut showed no sign of ending a crisis fuelled by fears over stalling growth in the world's number-two economy.

Frazzled investors sent Europe's top indexes falling by more than one percent in late morning trade after a choppy session on Asian bourses, and analysts predicted more turbulence ahead.

China's central bank reduced interest rates and slashed the amount of money banks need to hold in reserve on Tuesday -- its second such double move in two months -- in a bid to stoke growth.

The measures are not only aimed at boosting cash flow in China, but also to revive confidence that Beijing can steer the economy away from a hard landing and keep global growth on course.

China's slowdown has cast a dark shadow over markets because the Asian powerhouse represents an around 15 percent of global economic activity according to analysts -- and is a top consumer of many commodities.

"Chinese growth over last 10 years has been a driving force for the world economy," said Mike McCudden, head of derivatives at online stockbroker Interactive Investor.

"A Chinese slowdown has huge implications for the global economy as they are a major trading partner importing goods and services from other countries," he told AFP.

"Furthermore, the impact on global markets hits pension funds -- and therefore the back pocket of investors and retirees."

The pain of that blow has been acute over the last week, with global equity markets losing $2.7 trillion in value in Monday's slide alone.

- 'Market roller-coaster continues' -

The Chinese rate cut initially fuelled a rebound in Europe on Tuesday but optimism fizzled by the end of the US session, and on Wednesday Asian markets see-sawed in nervous trade.

"The struggle between gains and losses suggests that the market doesn't really know what to make of the policy move yet," Bernard Aw, a strategist at IG Asia, told Bloomberg News.

China's benchmark stock index fell 1.27 percent to 2,927.29 points, after veering wildly between losses and gains of around four percent during the day.

Other Asian shares were mixed, with Tokyo rising 3.20 percent, Seoul closing up 2.57 percent and Sydney adding 0.69 percent, while Hong Kong followed Shanghai down to close 1.52 percent lower.

"The equity market roller-coaster continues," said TrustNet analyst Tony Cross as Frankfurt, Paris and London all lost about 1.3 percent after Tuesday's strong gains.

"It's Wall Street's slump... that appears to be setting the pace for the UK market and, as is often the way after these excessive moves, this volatility appears likely to be with us for some time yet."

- 'Full-blown crash' -

Chinese stocks have lost more than 40 percent of their value since a year-long, debt-fuelled rally collapsed in June, prompting Beijing to unleash unprecedented market support measures, including using state-backed vehicles to buy up shares.

Some analysts see Beijing's handling of the market slump as a further litmus test of the government's ability to guide the economy to a more market-oriented model after the shock devaluation of the yuan two weeks ago.

"If problems on China's financial markets and real economy deepen, and the authorities fail to contain the situation, a full-blown financial and economic crash in China could ensue," said Christophe Donay, chief strategist at Pictet Wealth Management.

"This is currently the biggest risk for the global economy and financial markets."

China's central bank on Tuesday warned that the "economic growth rate remains under pressure," adding the cuts were meant in part to "support the real economy to continue to develop healthily."

The People's Bank of China (PBoC) cut its benchmark lending and deposit interest rates by 0.25 percentage points each, and its reserve requirement ratio by 0.50 percentage points.

The bank has now cut interest rates five times since November in a bid to spur the slowing economy as concerns mount it may miss its seven percent growth target for the year.

But international investors said more would must be done to fully reassure markets, especially as the US Federal Reserve is expected to raise interest rates for the first time in nearly a decade by the end of 2015.

The head of the PBOC's research unit Tuesday blamed the US for the market volatility, saying expectations for a US rate rise in September had been the "trigger" for the wild swings in world markets, Xinhua reported.

While this week's slump in Shanghai may have a limited impact on the broader economy, it reflects some investors' views that the sky-high valuations of quoted companies are not justified.

-- Bloomberg News contributed to this report --

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today nervous markets ride rollercoaster after china rate cut Arab Today, arab today nervous markets ride rollercoaster after china rate cut

 



Arab Today, arab today
Arab Today, arab today Nohan Seyam designs beautiful accessories

GMT 20:02 2017 Tuesday ,21 February

Nohan Seyam designs beautiful accessories
Arab Today, arab today Tourism shows signs of recovery

GMT 09:59 2017 Monday ,20 February

Tourism shows signs of recovery
Arab Today, arab today Sarah Belamesh designs antiques of "ceramic"

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"
Arab Today, arab today Top Yemen commander killed

GMT 09:55 2017 Wednesday ,22 February

Top Yemen commander killed
Arab Today, arab today To probe sexual harassment claims

GMT 10:08 2017 Tuesday ,21 February

To probe sexual harassment claims

GMT 19:53 2017 Monday ,20 February

Large stocks fall pushing down Nairobi bourse

GMT 18:36 2017 Monday ,20 February

Heavy selling drags Oman shares lower

GMT 06:16 2017 Monday ,20 February

Bank shares lift Tadawul

GMT 13:43 2017 Sunday ,19 February

Local institutional buying lifts Oman shares higher

GMT 15:33 2017 Saturday ,18 February

Lock-up shares worth 39 bln yuan eligible for trade

GMT 09:49 2017 Saturday ,18 February

Qatar Stock Exchange Index Gains 190.17 Points This Week
View News in Arabic - Business: أسواق مالية
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today To hold social dialogue over secondary school

GMT 07:43 2017 Wednesday ,22 February

To hold social dialogue over secondary school
Arab Today, arab today 63-Year-Old Woman Delivers Baby

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby
Arab Today, arab today Milan laughs while Rome cries

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Competes Sweden and Germans by S90

GMT 22:36 2017 Thursday ,16 February

Competes Sweden and Germans by S90
Arab Today, arab today Janat pleased for issuing 'Good Morning'

GMT 06:41 2017 Monday ,20 February

Janat pleased for issuing 'Good Morning'
Arab Today, arab today Small ponds have outsized impact

GMT 15:53 2017 Tuesday ,21 February

Small ponds have outsized impact

GMT 06:34 2017 Sunday ,19 February

Ahmed Fahmy stresses he did not ignore singing

GMT 06:50 2017 Wednesday ,15 February

Tragic fluctuations of Bakhtiari's life revealed

GMT 12:22 2017 Monday ,20 February

Kanye West puts hijab-wearing model

GMT 14:06 2017 Friday ,17 February

London to tax old cars

GMT 23:29 2017 Thursday ,16 February

Home built on sand castles-style costs $8m

GMT 05:15 2017 Tuesday ,21 February

Omega 3 can reduce asthma cases

GMT 19:16 2017 Friday ,17 February

Aziz House ready to host the tourists

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 12:39 2017 Monday ,20 February

newest smartphone another winner for Huawei

GMT 16:08 2017 Wednesday ,15 February

Shawsh reveals her collection "Jewelry of dreams"
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday