Chinese stocks sank on Monday after China’s central bank made smaller-than-expected adjustments to interest rates, undermining hopes of stimulus for the world’s second largest economy.
“The 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,” analysts at Capital Economics wrote in a research note on Monday.
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