Investors in China’s mainland stock markets look set for another bumpy ride next week after Beijing cut interest rates on Saturday, facing-off with stock market pundits who say equity valuations are too high.
China’s central bank said on Saturday it would cut rates by 25 basis points and trim the reserve requirement ratio for financial institutions.
“The government appears eager to maintain a bull market to expand the capital market and reduce reliance on bank lending, although the use of monetary policy for that purpose is questionable,” said Lan Shen and Shuang Ding, economists at Standard Chartered in a note to investors on Saturday.
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