Central Bank Cut Interest Rate Brings Positive Energy To Stock Market

The sudden "interest rate cut" of the central bank played an immediate effect in the stock market. On Monday, under the stimulation of interest rate cuts, the Shanghai and Shenzhen two cities were fully blooming, and the transaction volume was released again. The Shanghai Composite Index, which has a "wind vane", has gone higher and higher. It has risen 1.85% in late trading. It has not only stood at 2500 points of integer entry, but also hit a new high in three years, with nearly 40 stocks in two cities. All of these witnessed the super performance of the stock market.

In the past two years, the central bank has monetary policy This change has been reflected in the quietly changing direction, directional reduction, fine-tuning, or opening of floodgates by means of monetary instruments. If directional monetary policy is loosening, then the central bank's interest rate cut suggests that monetary policy may shift to easing. There is no doubt that the impact of loose monetary policy is long-term and positive. This is especially true for the fund driven A share market.

Although it is difficult to ease the financing difficulties of enterprises, especially the financing difficulties of small and medium-sized enterprises, the interest rate cut can reduce the financing costs of listed companies, and can significantly reduce their financial costs. The reduction of financing costs and financial costs, in turn, will help to improve the performance of listed companies, thereby enhancing their investment value and providing support for their stock prices. Therefore, the positive effect of interest rate cuts on listed companies is real.

On the other hand, interest rate cuts are also conducive to improving the confidence of the whole market. Since 2009, A shares have been "bully global" for many years. Investor Lack of confidence in the market. In late July this year, the two cities of Shanghai and Shenzhen began to rebound, and A shares have entered a "technological" bull market, and people's minds are rising, and the pilot of Shanghai and Hong Kong's opening of the floodgates, especially investors, is closely related to the confidence that the market has gradually resumed. The interest rate cut is obviously earlier than the market expectation in the time, and it is of great benefit to improving the market capital and improving the performance of listed companies, which is conducive to enhancing investor confidence.

From the central bank Rate cut The impact on the market shows that during the period, there are ups and downs. The central bank's latest interest rate adjustment took place in 2012. In June 8th and July 6th of that year, the central bank lowered interest rates for two times in the short term, and the stock market showed a rise or fall on these two trading days. As the stock market was in a doldrums, the stock index was in a downward trend. The two rate cuts did not play a role in raising the stock market. On the contrary, the stock index hit a 1949 low in December 4th.

However, the stock market environment that lowered interest rates was no longer the same as then. First, the Shanghai and Hong Kong through the floodgates for A shares brought incremental funding. Data show that Shanghai and Hong Kong last week brought more than 20 billion yuan to A shares. In view of the "wealth effect" of A shares is stronger than Hong Kong stocks, it will attract more foreign capital to join. The two is that the blue chips in the "technical" bull market are eye-catching, which lays the foundation for further development of the market. The three is the difference between the stock market and the stock market in 2012. At present, A shares are constantly expanding space. Four, investors are gradually building confidence in the stock market. Under such a background, the central bank's interest rate cut will bring positive energy to the A share market.