Markets keep eye on China rates

Uncertainty over China’s monetary stance is affecting Asian markets, after Monday’s sharp gains turned sluggish yesterday. China avoided a rise in interest rates last week, opting only to nudge up the reserve requirement ratio (RRR). “The market’s sharp gains on Monday were driven by pent up demand following milder than expected policy tightening,” said Zhuo Xiangyu of China Securities Information. But “many people” fear that monetary tightening will come before the year end, he said.