Mainland China share market ended lower after wiping out initial gain on Thursday, 05 February 2015, as the People's Bank of China reserve-ratio cut failed to impress investors who are worried about an ongoing crackdown on high-leverage trading. The Shanghai Composite Index closed 1.2% down at 3136.53, reversing an advance of as much as 2.4%.
Shares in the Mainland market advanced in morning trade as investors welcomed the Chinese central bank's announcement late Wednesday to cut reserve requirement ratio by 50 basis points to stimulate the slowing economy. However, the early bout of excitement quickly faded as a reserve-ratio cut failed to ease concern the economic slowdown is deepening, weighing down shares of industries that highly correlated with China's overall economic performance. Further, supply pressure from a batch of initial public offerings slated for next week and stubbornly high short-term interest rates in the money market also weakened investors' appetite.
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