Chinese stocks fail to fire at start of trade following rate cut

BARCELONA – 1992 : Tracey Miles of Great Britain is captured high over the Sagrada Familia during a diving competition prior to the Barcelona Olympics of 1992.(Photo by Bob Martin /Getty Images)

Chinese stocks, in contrast to past price action following a rate cut from the PBoC, traded mainly flat at the start of today’s session.

After recording its largest weekly decline in five years last week, some 5.3%, traditionally the index would have surged higher today – as happened following rate cuts from the PBoC in November and February.

However, after initially opening higher, the index is now oscillating around break-even.

It’s only early in the session and there be might be a rally lurking, but perhaps investors view the the rate cut more about policy reform than easing, something Soc Gen believes, or that continued cuts to interest rates and reserve ratio requirements are indicative of an economy that is slowing far quicker than policymakers had expected.

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