(Yicai Global) Aug. 15 -- The People’s Bank of China cut two key interest rates today, which along with other policies to stabilize growth should buoy China’s stock market in the coming month, analysts said.

The central bank conducted CNY400 billion (USD59.1 billion) in one-year medium-term lending facility operations at an interest rate of 2.75 percent, down 10 basis points. It also cut the rate on seven-day reverse repos by 10 bps to 2 percent in its CNY2 billion (USD295.6 million) worth of reverse repo operations.

The stock market has retreated somewhat after rebounds in May and June, analysts said, adding that some investors that failed to benefit from the rebounds may enter the market this time.

As of today’s close, the Shanghai Composite Index was little changed at 3,276.09, the the Shanghai Star Board 50 Index was down 0.2 percent at 1,143.75, the Shenzhen Component Index was up 0.3 percent at 12,460.22, and ChiNext was 1 percent higher at 2,718.59.

Reducing interest rates can help stabilize growth, and there might also be support in the property industry, Hu Yu, chief economist at Xinding Fund Management, told Yicai Global. It is necessary to release more signals of support for growth in view of the current consumption and investment data, which is expected to slow further in September and October, Hu said.

In the first seven months, China’s fixed asset investment climbed 5.7 percent from the same period last year, a drop of 0.4 percentage point from the year-on-year growth rate for the first six months, according to data the National Bureau of Statistics released today.

Retail sales of consumer goods in July grew 2.7 percent from a year earlier, down 0.4 point from the yearly growth in the previous month.

The stock market may climb this month and next after the downward adjustment last month, said Fan Jituo, a strategy analyst at Cinda Securities. Some investors have failed to benefit from the rebounds since April, Fan said, and the current decline in economic growth has generally been reflected in the stock market. But the cut in interest rates is conducive to a gain in stocks.

Regarding the lower-than-expected real estate market sales, Fan noted that there is generally quite a long delay before stabilized growth is reflected in improved property sales.

Editor: Tom Litting