After crashing to desperate levels through this week and sending shockwaves to bourses across the globe, China’s stocks edged up sharply at midday on Wednesday (26 August). While Asian and European shares turned higher, the bourses in the US and Middle East showed a downward trend at the opening minutes.
Shares on the second biggest economy’s benchmark Shanghai Composite had fallen approximately 16 per cent this week, dragging global stock markets into turmoil.
The good news from China comes after Beijing’s central bank cut its key lending rate by 0.25 per cent to 4.6 per cent in an effort to arrest volatile stock markets. This is the fifth interest rate cut by the People’s Bank of China since November last year.
A rate cut will make it cheaper for banks to borrow from the central bank and will in turn make it easier for businesses and private people to borrow money from those banks.
Half an hour before the close, the mainland’s benchmark Shanghai Composite was just 0.17 per cent higher at 2,970.13, recovering from early morning losses, a BBC report said.
Meanwhile, major stock markets in the Middle East climbed down in early trade as they consolidated after a strong rebound, showing signs that selling pressures were easing on the back of stable oil prices and stronger Asian stock markets on Tuesday.
The Dubai Financial Market’s main index, which was 4.6 per cent up at the close on Tuesday, bounced back to 1.1 per cent in the opening minutes. On Sunday, it had fallen more than eight per cent to 3,451 points, its lowest close since March 30. Emaar Properties and DAMAC Properties, which gained 3.4 per cent and 7.7 per cent respectively on Tuesday, fell 0.8 per cent and 2.2 per cent.
Abu Dhabi Securities Exchange’s General Index which had gained 1.6 per cent on Tuesday slipped 0.4 per cent. Real estate major Aldar Properties lost 2.6 per cent after gaining 7.0 per cent on Tuesday.
Qatar’s index edged down 0.3 percent with Islamic bank Masraf Al Rayan, the most heavily traded stock, losing 1.8 percent.
While Qatar’s QE Index fell 0.3 per cent, Saudi Arabia’s Tadawul All Share Index was down 1.7 per cent in the opening minutes.