China shares open higher after interest rate cut

Chinese shares opened higher on Monday after authorities cut interest rates at the weekend following market turmoil last week.

The benchmark Shanghai Composite Index was up 2.31 percent, or 96.90 points, to 4,289.77 in early trading, while the Shenzhen Composite, which tracks stocks on China's second exchange, rose 1.77 percent, or 44.41 points, to 2,547.37.

On Saturday China's central bank announced interest rate cuts of 0.25 percentage points and reduced some reserve requirement ratios limits on the amounts banks can lend by 0.50 percentage points. 

Monday's share price rises came despite Greece imposing capital controls as its debt crisis threatens to a possible eurozone exit.

Analysts say China's central bank moves were in response to dramatic stock market falls over the previous two weeks.

When Shanghai peaked on June 12 it had risen more than 150 percent over the previous 12 months, but by Friday it had plunged 18.8 percent, while Shenzhen was 20.3 percent off its top, putting it into bear market territory.

“The cut of interest rate and reserve requirement in the weekend is the main factor that affects the stock market today," Zhang Yanbing, an analyst from Zheshang Securities, said.