Beijing under pressure to ease monetary policy
Inflation falls to a four-month low while growth in money supply is at its lowest in five months
Beijing is under fresh pressure to implement another round of policy easing, including a rate cut, with mainland inflation falling to a four-month low and money supply growth the lowest in five months.
The mainland's benchmark equity indices rallied in morning trade yesterday but ended up in the red on uncertainties about how far Beijing would go in easing monetary and fiscal policy to revive the economy.
The Shanghai Composite Index rose as much as 1.09 per cent in the morning session before closing the day down 0.29 per cent at 2,311.68 points. The CSI 300 Index, which tracks the 300 major Chinese firms listed in Shenzhen and Shanghai, fell 0.37 per cent to close at 2,423.45.
Sentiment was muted after Premier Li Keqiang failed to ease concerns about slowing economic growth in his speech at the opening of the World Economic Forum in Tianjin on Wednesday. Market participants had been hoping he would suggest solutions to a downturn in the property market, which has played a pivotal role in the mainland's economic development.
"We do expect policymakers to step in when economic growth starts to show below [target]," said Eddy Loh, investment strategy director at Barclays.
"Li's tone in Tianjin was slightly dovish, so I think there is a need for some targeted easing after the recent PMI (purchasing managers index) declines.