The markets in Asia hardly react to the Chinese interest rate decision.
(Photo: Visual China Group/Getty Images)
Tokyo China’s latest interest rate cut on Tuesday did not lift investors’ buying mood in Asia. China cut two key interest rates for the first time in ten months: the one-year LPR by 10 basis points to 3.55 percent and the five-year LPR by the same margin to 4.20 percent. Markets feared the move would not be enough to boost confidence in the ailing economy.
“I don’t think they (the LPR cuts) are making the needle move at all,” said Saxo Markets’ Redmond Wong. A 15 basis point cut would have been a “stronger message” to boost China’s real estate sector. China’s real estate index fell 0.74 percent in early trade. Most loans in China are based on the one-year LPR rate, the key rate for five-year loans affects mortgages.
The Shanghai stock exchange was down 0.3 percent. The index of the most important companies in Shanghai and Shenzhen lost 0.1 percent. The Nikkei index, which comprises 225 values, was 0.6 percent lower at 33,162 points. Among the Nikkei stocks, 180 companies fell while only 43 rose. Insurers led the losses with a minus of 4.05 percent. The broader Topix index fell 0.7 percent to 2,275 points.
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