Thursday, October 9, 2008

Chinese shares open 1.59% higher after interest rate cut

Chinese share prices rose 1.59 percent at opening on Thursday after the central bank announced cuts in both the interest rate and reserve-requirement ratio in the latest effort to boost the economy.

The Shanghai Composite Index opened at 2125.57 points, up 33.34points or 1.59 percent from Wednesday's closing 2092.22. The smaller Shenzhen Component Index opened at 7043.55 points, up 119.06 points or 1.71 percent from Wednesday's closing 6924.49 points.

The rise ended a three straight day fall since Monday when the Chinese stock market resumed trading after the weeklong National Day holiday.

On Wednesday evening, the People's Bank of China announced the deposit and lending rates would be lowered by 0.27 percentage points from Thursday and the reserve-requirement ratio would be down by 0.5 percentage points from Oct. 15.

The loosening in monetary policy, the second such move in less than a month, highlighted the government's rising concern over the slowing economy and slumping capital market, analysts said.


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