Chinese shares experienced their worst day in six months as investors showed little enthusiasm for Beijing’s latest monetary policy moves.
The Hang Seng in Hong Kong dropped 0.9% to 17,469.36, while the Shanghai Composite index fell 1.7% to 2,915.37, marking its biggest single-day loss since February. The domestically focused CSI 300 index declined by 2.1%.
Chinese markets turned lower as investors remained sceptical following the central bank’s decision to cut two key interest rates by 10 basis points on Monday.
The People’s Bank of China also reduced the collateral requirements for its medium-term lending facility and lowered the interest rate for its standing lending facility by 10 basis points to 2.7% for seven-day loans and 3.05% for one-month loans.
However, these recent moves, following a major policymaking meeting of the ruling Communist Party, have failed to boost markets. In a note to clients, Mizuho Bank stated: “Size matters.
And obviously, a 10-basis point cut is not particularly inspiring. Certainly, nowhere near ‘big gun’ stimulus, which is arguably what the economy needs.”
