国际英语新闻:China's Stock Slump Continues; Europe's Markets Bounce Back

China cut interest rates a quarter of a percentage point Tuesday, to 4.6 percent, and eased bank reserve requirements, effectively pumping more money into the system to stimulate its weakening economy.  But while the move helped stabilize markets in Europe and, for a time, the U.S., it wasn’t enough to halt the slide in Asia. 

Kevin O’Leary at Boston-based investment manager O’Shares Investments said that’s because the outlook for China’s growth remains murky.

"Instead of thinking of China growing at 8 percent, we think, it's going to grow 5 or 6 percent," he said. "That's 20 percent less growth than anticipated. “

That’s led some investors to avoid the uncertainty in Chinese equities and focus instead on looking for value in discounted stocks.

Eric Wiegand, a senior portfolio manager at US Bank, said that "for U.S. investors, we find that this is creating opportunities. We still believe that as far as domestic equities are concerned, there is a great deal of attractiveness to shares.”

But unless China finds its footing, any recovery in U.S. and European markets is bound to be short-lived. 

Economist Nicholas Lardy of the Peterson Institute for International Economics in Washington, one of the leading experts on China’s economy, said, "I think the main reason China matters so much is it’s the second-biggest economy in the world. It’s the second-largest trading economy, so if China’s economic performance is going to suffer, the rest of the world is going to pay a price.”

For financial markets around the world, the price has been increased volatility. That was evident Tuesday on Wall Street, when stocks rose as much as 3½ percent in early trading, only to plunge back into negative territory in time for the closing bell. The Dow Jones industrial average was off 1.3 percent at the close of trading.

Better news in Europe

Investors in Europe, though, were reassured, with stocks rising 3 percent in London, 4 percent in Paris and 5 percent in Germany.

Earlier Tuesday, China's Shanghai index was down more than 7 percent, while Tokyo was down nearly 4 percent. Hong Kong's Hang Seng rallied in the final hour to finish just ahead in positive territory.

Chinese officials acted after several days of plunging stock prices around the world as investors worried that Chinese economic growth was slowing.

The nervousness had pushed down global stock and oil prices Monday, including an 8 percent stock market plunge in China.

Monday's slump included U.S. markets, which experienced a volatile day of trading before finishing down at least 3.6 percent.