REFILE-China stocks fall, shrug off PBOC rate cut
(Corrects grammatical error in opening paragraph)
By Kazunori Takada and Samuel Shen
SHANGHAI May 11 (Reuters) - Chinese stocks edged lower in early Monday trade as an interest rate cut by the central bank failed to impress investors who are becoming increasingly worried that the recent rally has been overdone.
Money rates eased while the yuan steadied after the People's Bank of China said on Sunday it was lowering its benchmark one-year lending and deposit rates by 25 basis points, the third cut in six months, to help support an economy headed for its slowest growth in a quarter of a century.
As of 0150 GMT, the CSI300 index of the largest listed companies in Shanghai and Shenzhen was down 0.2 percent, while the Shanghai Composite Index was down 0.1 percent.
"The timing of the rate cut is well within expectations while the depth of the cut is smaller than many had expected," said Zhang Chen, analyst at Shanghai-based hedge fund manger Hongyi Investment.
"The market is in a consolidation period, and I don't think the rate cut could change that pattern."
He added increase in supply from initial public offerings were also weighing on the market.
The SSEC index posted its biggest weekly decline in nearly five years last week, triggered by signs of tighter regulatory scrutiny over margin lending, which has helped fuel a near doubling in China's stock market over the past year despite a flagging economy. Continuación...