Shanghai---Chinese shares opened higher on Monday after authorities cut interest rates at the weekend following market turmoil last week.
The benchmark Shanghai Composite Index was up 2.31 percent, or 96.90 points, to 4,289.77 in early trading, while the Shenzhen Composite, which tracks stocks on China's second exchange, rose 1.77 percent, or 44.41 points, to 2,547.37.
On Saturday China's central bank announced interest rate cuts of 0.25 percentage points and reduced some reserve requirement ratios -- limits on the amounts banks can lend -- by 0.50 percentage points.
Monday's share price rises came despite Greece imposing capital controls as its debt crisis threatens to a possible eurozone exit.
Analysts say China's central bank moves were in response to dramatic stock market falls over the previous two weeks.
When Shanghai peaked on June 12 it had risen more than 150 percent over the previous 12 months, but by Friday it had plunged 18.8 percent, while Shenzhen was 20.3 percent off its top, putting it into bear market territory.
"The cut of interest rate and reserve requirement in the weekend is the main factor that affects the stock market today," Zhang Yanbing, an analyst from Zheshang Securities, told AFP.
"The policy is a good one, but the prospect is still not certain yet. Some investors that bore losses last week may also start to sell. So the trend may still be a bit volatile. We need to wait and see."
Analysts say the last fortnight's falls were mainly triggered by new restrictions on margin trading and accelerated by growing concern about overvaluations.
But they said the government still wanted the positive trend to continue.
"The rate cut is much earlier than our expectation," Nomura economists wrote in a note. "In this case, we think the easing is to contain the risk of systemic crisis rather than one to achieve faster growth."
Monday's official China Securities Journal carried a speech given by the paper's party secretary and editor-in-chief Wu Jincai that claimed Chinese stock markets are set to enjoy a "golden time" that will last for more than three decades.
"As the luckiest generation in the history of the Chinese nation, we are honoured to witness the great Chinese national rejuvenation -- the realisation of the Chinese dream," Wu said.
"During the process, a golden time that will last for more than 30 years will be generated in China's capital market."
AFP
