Awwal 05, 1432, Feb 08, 2011, SPA -- China's second interest rate increase in just over a month failed to dent market optimism Tuesday, with many of the world's leading stock indexes holding at levels not seen since the summer of 2008, before the collapse of Lehman Brothers triggered the biggest bear market since World War II, according to AP. In a widely expected move, the People's Bank of China announced Tuesday on its website that the benchmark 1-year deposit rate would rise by a quarter percentage point to 3 percent and the 1-year lending rate would increase by the same amount to 6.06 percent. Tuesday's rate increases came at the end of China's Lunar New Year festivities _ markets are due to open again Wednesday _ and follow last Christmas Day's surprise rise. The moves are designed to keep price increases in check and make sure economic growth is running at sustainable levels. The worry in the markets is about by how much growth will slow _ after all it's been Chinese growth over the last few years that prevented a global recession from turning into a depression. That said, investors would much rather a gradual and orderly tightening of monetary policy than a swift reversal further down the line. Stock markets took a small knock in the immediate aftermath of the news but the optimism that has been evident in markets so far this year supported markets in Europe and the U.S. «A further rate hike by China's central bank has been largely anticipated, with global risk appetites showing resilience in the aftermath of the move,» said Vassili Serebriakov, an analyst at Wells Fargo Bank. -- SPA
