Policymakers put focus on supporting economy, not market

With the government’s efforts to prop up equity prices through direct purchases in tatters, policymakers have changed tack with a simultaneous cut to benchmark interest rates and the required reserve ratio. The move may halt the market slide but we suspect the primary motivation is to shore up confidence in the state of the wider economy. It is notable that, in the two days prior to this move, official purchases of equities seem to have halted.