As soon as the government confirmed the 5.1 percent interest cut, the Shanghai Index jumped by 3 percent raining hopes that the economy could finally be bouncing back

When the Chinese economy slipped into recessionary phase, Chinese stock investors made major losses. This in turn led to the investors losing a lot of money and at the same time prompted the government to rework the financial policy in order to control the flow of money into the economy. On its part, the government initiated several projects which also included interest cuts. Last weekend, the recently announced interest cut became the third one since November 2014. According to a detailed report on Business Standard, the rate cut by the Chinese government played a pivotal role in lifting the sentiment of markets throughout the world.

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China Daily reported that the internet companies were amongst the leaders spearheading the market gains. The Shanghai Index gained 127.67 points. In fact, the online education platform Talkweb jumped by the daily limit of 10 percent making it one of the major gainers. While internet led the gains, healthcare sector remained bullish. Even the insurance companies showed positive signs of bouncing back with New China Life Insurance registering a growth 8 percent. Other gainers include China Pacific Insurance, China Life Insurance and China Ping An, each of which climbed by more than 2 percent.

Meanwhile, trade analysts were happy that the interest cuts were finally beginning to pay off. However, the market investors are also saying that the government will have to continue with the interest rate cut in order to regain the momentum of the growth that the economy was previously experiencing.

Haitong Securities, a big player in the region, also went on to share its speculation indicating that the Chinese government will have to announce at least four more interest cuts in order to regain the economic stability in the country. 

TagsChina index news, China stock market