Investors cried "too little too late" on Wednesday as key Chinese share indices reacted nervously to action from the country’s state bank to stem losses.
An interest rate cut announced by China’s state bank on Tuesday and implemented Wednesday had mixed results during Wednesday trading, as the key China’s key share indices inched higher only to dive again on fresh waves of selling.
Trading floors face another uncertain day following better results on Tuesday, when European and US markets rallied. London's FTSE100 closed up 3 per cent. But by the final hours of Tuesday trading in New York, the Dow Jones had all but collapsed, going from gains of 440 points in the day to closing down 200 points, making it the sixth straight day of trading losses for US markets.
"By the time New York had digested the news, dealers and economists decided it was not enough and it was also too little too late," said David Buik, market commentator at Panmure Gordon.
Beijing slashed interest rates on Tuesday to encourage banks to lend to retail investors, in the hope that they might trade on the stock market and stem a tide of losses that has swept trillions off the value of global stocks.
But investors remain unconvinced. "If one thing spooks investors it’s uncertainty – China devaluing the yuan, intervening in the stock markets and cutting interest rates have caused investors to say enough is enough," said Shai Heffetz, managing director of Intertrader.
The FTSE100 opened down 1.5 per cent on Wednesday after improvements yesterday took a slide in late trading.Reuse content