China raised bank reserve requirements

[katie]

Markets opened high yesterday but later in the day, after China raised bank reserve requirements surprised many investors and were reluctant to buy any more equities, taking European markets lower. Luc Van Hecka, chief economist at KBC Securities, said: "If you have a high growth and low interest rate scenario, it's almost an open invitation for an asset bubble. It's a wise thing that China is trying to deal with that before it becomes impossible to manage. If expectations are very high, then there is a probability that you will get some disappointments along the way. But it's too early to say something about earnings."


France’s CAC 40 lost 1.1 percent, while Germany’s DAX sank 1.6 percent. The UK’s FTSE 100 slid 0.7 percent.