China market slump: Shares end lower despite rate cut

Chinese shares have closed lower despite a fresh rate cut by the central bank.

The mainland’s benchmark Shanghai Composite fell 1.27% to 2,927.29, after veering in and out of negative territory.

It had fallen about 16% this week, rocking global markets.

On Tuesday, China’s central bank cut its key lending rate by 0.25 percentage points to 4.6% in a bid to calm stock markets after the past days’ turmoil.

The dramatic losses and volatility in China have shattered investor confidence and led to sharp falls in Asia and the US over the past days.

European markets were down by about 1% in morning trading on Wednesday, after rallying on Tuesday.

The interest rate cut was the fifth 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.