China cuts interest, but stocks still fall
TOKYO — Global stock markets mostly fell today as initial euphoria over an interest rate cut by China the day before succumbed to lingering worries over longer-term problems with its economy.
European shares fell back from their surge the day before following Beijing's announcement late Tuesday that it was easing monetary policy to help stabilize gyrating markets and counter short liquidity.
Germany's DAX dropped 0.9 percent to 10,033.24, Britain's FTSE 100 slipped 1.2 percent to 5,997.09 and the CAC40 in France shed 1.4 percent to 4,501.51. However, Wall Street investors looked ready to plunge back in and buy, with Dow futures up 1.3 percent today and S&P futures up 1.5 percent.
China's own benchmark, the Shanghai Composite Index, dropped late in the day, losing 1.3 percent after a volatile series of ups and downs. That followed a 7.6 percent slump on Tuesday and an 8.5 percent loss the day before. But stocks in Japan, South Korea and Australia gained.
Markets have been volatile for weeks on deepening unease over the ramifications of slowing growth in China, the world's second-largest economy and the driver of much of global growth over the past decade.So, many in Asia went to bed on Tuesday smiling over China's decision to slash its key interest rate, only to awaken to yet another decline overnight on Wall Street, Nicholas Teo, an analyst at CMC Markets, said in a commentary. “All of a sudden, China and the performance of the Chinese markets have now taken the lead in determining daily direction for trading in stocks worldwide,” he said.The apparent inability of Chinese regulators to calm the markets has spooked investors already fretting over when the U.S. Federal Reserve will raise interest rates.The Fed has signaled it could begin raising its key interest rate from near zero for the first time in nearly a decade as early as this year. But it is not expected to deliver a policy update until it wraps up a meeting of policymakers next month.In a last-minute sell-off Tuesday, the Dow Jones industrial dropped 1.3 percent, extending Wall Street's losing streak to six days.
