BEIJING: China stocks ended higher on Wednesday morning after wild swings in early trade as investors hoped fresh interest rate cuts by the central bank would stabilize the economy and stop a stock market rout that has seen prices fall 20 percent in four days.
But the market was generally unimpressed with China’s strong monetary easing measures announced on Tuesday night, believing much more official support is needed, and traders said shares remained vulnerable to another selloff.
Blue chips reversed early losses, but small-caps continued to slide, with some traders attributing the volatility to margin calls and mutual fund redemptions
After opening 0.7 percent at open, the blue-chip CSI300 index .CSI300 fell as much as 3 percent but managed to end the morning up 1.7 percent at 3,094.03 points.
The Shanghai Composite Index .SSEC also reversed early losses of nearly 4 percent, rising 0.8 percent to 2,988.76 points by the lunch break.
Stock index futures CIFc1, which slumped 10 percent for two days in a row, rose sharply by midday, after regulators restricted trading in the instruments in the latest effort to crack down on speculation.
The People’s Bank of China cut interest rates and lowered the amount of reserves banks must hold for the second time in two months, in an apparent move to aid the economy and the slumping stock market.
“As I look at the screen – a few greens, a few reds. In short, the market was not impressed,” wrote DBS Chief Investment Officer Lim Say Boon.
