China’s central bank has cut interest rates and lowered the amount its reserve banks must hold, to support a stuttering economy and plunging stock market that sent shock waves around the globe. People’s Bank of China cut its key lending rate by 0.25 percentage points to 4.6 per cent, an effort to calm stock markets. It is the fifth interest rate cut since November and will come into effect from today.
This move has boosted global share prices further, however, US stocks ended in descent after initials gains. London’s FTSE 100 jumped 3 per cent, while Germany’s Dax gained 5 per cent and the Paris Cac rose by 4.1 per cent.
Other European markets, including, Madrid, Moscow and Milan, all closed sharply higher. However, US Dow Jones industrial average and the S&P 500 closed about 1.3 percent lower after rallying nearly 3 percent, earlier, their biggest reversal to the downside since 2008.
Meanwhile, after Monday’s over 1,600 points loss Sensex at the Bombay Stock Exchange recovered partially yesterday and climbed 291 points, to close at 26,032. The Nifty also rose 72 points, to close at 7,881.