China's Market Dips Amid Interest Rate Cut Concerns

China shares fell on Thursday due to concerns about the fragile economic recovery, despite the U.S. Federal Reserve's decision to cut interest rates by 50 basis points. Both the CSI300 Index and Shanghai Composite Index dropped 0.5%. Investor sentiment remains subdued, pointing to uncertainties in China's macroeconomic policies and growth outlook.

China shares dipped on Thursday as concerns over a fragile economic recovery offset any benefits seen from the Federal Reserve's overnight decision to cut interest rates by a larger-than-usual 50 basis points.

China's blue-chip CSI300 Index and Shanghai Composite Index both slipped 0.5% in early trade, while Hong Kong benchmark Hang Seng was roughly flat.

The U.S. central bank on Wednesday kicked off an anticipated series of interest rate cuts with a half-percentage-point reduction. Investor sentiment towards Chinese equities remains subdued even though the U.S. rate cut provides room for fresh easing by Beijing to support its sputtering economy.

Yan Wang, chief emerging markets and China strategist at Alpine Macro, said while Fed rate cuts are generally positive for emerging market assets, China's domestic macroeconomic policies and growth outlook are far more critical than the Fed's actions. 'Unfortunately, the predictability of these factors remains quite poor,' he said.

By sector, Hong Kong-listed mainland property stocks outperformed the broader market and was up 2.3%.

Tracking the U.S. central bank's move, the Hong Kong Monetary Authority (HKMA) on Thursday cut its base rate charged via the overnight discount window by 50 basis points to 5.25%. Hong Kong's monetary policy moves in lock-step with the United States as the city's currency is pegged to the greenback in a tight range of 7.75-7.85 per dollar.

(With inputs from agencies.)