China market soars after rates cut

Mainland China equity market spurted on Monday, 11 May 2015, on the back of central bank step to cut interest rates for the third time in six months to help the sluggish economy. All the SSE sectors advanced with shares of property and infrastructure companies being major gainers. The Shanghai Composite Index advanced 127.67 points, or 3.04%, to finish at 4333.58 points, off an intraday low of 4187.82. The CSI300 index increased 132.13 points, or 2.9%, to 4690.53.

The People's Bank of China (PBOC) announced the cut in its benchmark lending rate and one-year deposit rates by 25 basis points on Sunday. The rate on a one-year loan by commercial banks was down by 0.25%age points to 5.10%. The interest rate paid on a one-year deposit was lowered by 0.25 points to 2.25%. The cuts are expected to reduce financial costs for state companies and are a signal to state-owned banks to boost lending.

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