This morning, it's once again China that takes center stage in the financial arena. Its central bank has cut two of its key rates in an attempt to revive the economy. The one-year prime lending rate (LPR) was cut from 3.65% to 3.55% and the five-year prime lending rate from 4.3% to 4.2%. This represents a ten-point drop, the first for these two maturities since August 2022. The thing is, economists were expecting it, and some were even hoping for a 15-point drop in the 5-year LPR. As a result, disappointment dominates this morning.

The UK’s blue-chip index was down at the open on Tuesday, before inching up 0.1% at 9am. China demand concerns weighed particularly on miners and oil stocks.

Among stocks, electrical retailer Currys was up 2.5% before retreating to a 0.5% drop after fashion retailer Frasers announced it acquired an 8.9% stake.

Car dealer network Lookers jumped 33 % its Canadian peer Alpha Auto Group agreed to purchase the company for 465.4 million pounds.

The focus is now turning to British inflation data due Wednesday, which may influence the BoE's policy decision on Thursday. Another 25-basis-point hike is widely expected.

Things to read today:

Billionaires find big wins in big government (Financial Times)

China’s Sluggish Economic Rebound Seeps Into Plastic Market (Bloomberg)

Stock-Market Rally Costs Bears $120 Billion (WSJ)