Chinese Rate Cuts Portend Stock-Market Losses: Chart of the Day
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Chinese investors counting on interest-rate cuts to extend the nation’s stock-market rally may be setting themselves up for disappointment.
The CHART OF THE DAY shows the Shanghai Composite Index’s performance after a series of rate reductions in 2008 and 2012. The gauge fell 8.7 percent from Sept. 15 to Nov. 26, 2008, even as the People’s Bank of China lowered borrowing costs four times amid the global financial crisis. The index slid 4 percent from June 7 to July 5, 2012, with the central bank cutting rates on both days, and a further 5.2 percent in the next three months.