AUGUST 26 2015 10:28h

China stocks close lower despite central bank moves to aid economy

Nikkei fluctuates on US losses, China rate cut




The benchmark Shanghai Composite Index closed down 1.27 per cent Wednesday despite fresh measures introduced after sharp stock plunges in previous days.

The index dropped after opening up 0.53 per cent Wednesday morning.

The Shenzhen Component Index closed down 2.92 per cent while the ChiNext Index the ChiNext Index, which tracks tech and other growth enterprises, plunged 5.06 per cent.

The People's Bank of China on Tuesday evening cut its benchmark, one-year lending rate by 0.25 percentage points to 4.6 per cent, and the benchmark deposit rate by a similar margin to 1.75 per cent.

It also lowered the reserves that banks must hold, for the second time in two months, by 50 basis points to 18 per cent for most big banks effective September 6.

The bank announced the measures after the Shanghai index closed down 7.6 per cent following the nearly 9-per-cent loss on Monday.

It was the bank's fifth interest rate cut since November.

China is struggling to meet its growth target for 2015 of about 7 per cent - itself a slowdown from recent years - amid sluggish investment growth and recent figures showing falling exports and imports.

The country's gross domestic product grew 7.4 per cent in 2014, the weakest annual expansion in 24 years.