China shares surrendered most of an early rally to close slightly higher Thursday as continued worries about the slowing economy overshadowed the country's biggest interest rate cut in 11 years, according to AP. The benchmark Shanghai Composite Index closed up 1.1 percent, or 19.98 points, at 1917.86 after rising as much as 6.6 percent. The Shenzhen Composite Index for China's smaller second market rose 1.7 percent to close at 544.1. Elsewhere in Asia, markets rose on China's rate cut late Wednesday. Japan's benchmark Nikkei 225 jumped 2 percent, Hong Kong's Hang Seng Index was up 1.2 percent and Korea's KOSPI Composite Index added 3.3 percent. China slashed the interest on a one-year bank loan by 1.08 percentage points to spur private borrowing and support a multibillion-dollar government package to boost slowing economic growth. Investors had been expecting a cut and markets fell Monday when it failed to materialize over the weekend. «The interest rate cut already was factored into investors' expectations, although the cut was bigger than expected,» said Zhang Gang, an analyst for Central China Securities. More rate cuts and other stimulus moves are expected because «the worst time for the economy has not arrived yet,» Zhang said. Real estate, construction and steel stocks gained on expectations that the rate cut might boost housing sales. China Vanke Ltd., the country's biggest developer, jumped 3.1 percent to 7.01 yuan and Cofco Property Group added 3.5 percent to 6.17 yuan. Baoshan Iron & Steel Ltd., the country's biggest steel producer, posted a 2.2 percent gain to 5.13 yuan, and Xinjiang Ba Yi Iron & Steel Ltd., surged by the daily limit of 10 percent to 6.29 yuan. Tangshan Jidong Cement Ltd. soared by the daily limit to 9.65 yuan, Fujian Cement Inc. rose 5.5 percent to 4.41 yuan and Hebei Taihang Cement Ltd. added 2.2 percent to 6 yuan. Major banks were flat on expectations that the rate cut might squeeze their profits. China Southern Airlines and China Eastern Airlines were suspended from trading while they announced financing moves. Southern Airlines said it will get 3 billion yuan ($440 million) from the government to help the carrier through a financial crisis. China Eastern said it was seeking similar help. In currency dealings, China's yuan was traded at 6.8289 to the U.S.dollar in over-the-counter trading around 0800 GMT, down slightly from the close of 6.8282 in the previous session.
