{"id":51141,"date":"2023-08-21T11:24:41","date_gmt":"2023-08-21T15:24:41","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/chinese-stocks-drop-chinas-central-bank-delivered-an-unwelcome-surprise\/"},"modified":"2023-08-21T11:24:43","modified_gmt":"2023-08-21T15:24:43","slug":"chinese-stocks-drop-chinas-central-bank-delivered-an-unwelcome-surprise","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=51141","title":{"rendered":"Chinese Stocks Drop. China’s Central Bank Delivered an Unwelcome Surprise."},"content":{"rendered":"
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Chinese stocks sank on Monday after China\u2019s central bank made smaller-than-expected adjustments to interest rates, undermining hopes of stimulus for the world\u2019s second largest economy.\u00a0<\/p>\n

The People\u2019s Bank of China reduced its one-year loan prime rate (LPR) by 0.1 percentage point to 3.45% while the five-year rate was kept unchanged at 4.2%. Economists had expected a cut of 0.15 percentage point for both rates.<\/p>\n

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\u201cThe underwhelming LPR announcement strengthens our view that the PBOC is unlikely to embrace the much larger rate cuts that would be required to revive credit demand. Hopes for a stimulus-led turnaround in economic activity largely depend on the prospect of greater fiscal support,\u201d analysts at Capital Economics wrote in a research note on Monday.\u00a0<\/p>\n

The five-year loan prime rate is the reference rate for mortgages in China. The lack of a rate cut disappointed investors hoping for a boost to the real estate sector as
\n Country Garden Holdings,<\/span>
\n one of China\u2019s biggest property developers, faces a severe liquidity crunch\u00a0<\/p>\n

Stocks in China suffered, with Hong Kong\u2019s Hang Seng Index falling 1.8% on Monday and mainland markets also dropping. They were the biggest losers in mixed Asian trading, as Japan\u2019s Nikkei 225 gained 0.4%.\u00a0<\/p>\n

Disappointing stimulus raises questions about China\u2019s ability to restore its economic growth to prepandemic levels.
\n UBS
\n economists led by Tao Wang cut their 2023 growth forecast for China\u2019s gross domestic product to 4.8% from 5.2% previously on Monday.<\/p>\n

Write to Adam Clark at adam.clark@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Chinese stocks sank on Monday after China\u2019s central bank made smaller-than-expected adjustments to interest rates, undermining hopes of stimulus for the world\u2019s second largest economy.\u00a0 The People\u2019s Bank of China reduced its one-year loan prime rate (LPR) by 0.1 percentage point to 3.45% while the five-year rate was kept unchanged at 4.2%. Economists had expected […]<\/p>\n","protected":false},"author":1,"featured_media":51142,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-51141","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nChinese Stocks Drop. 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