The decision by the People's Bank of China (PBOC), the central bank, to cut the benchmark interest rate by 0.25 percentage points starting from Monday is within earlier market expectation, said Guotai Fund Management Co., Ltd.
The fund manger said in a research report on Monday that the central bank is expected to continue to cut the rate and required reserve ratio within 2015 but the room is to be limited.
China's economy has shown signs of recovery since the end of April and the economic slowdown is expected to be improved in the second quarter of 2015, said the report.
It forecasts that the gross domestic product (GDP) may stand at 6.9 percent-7 percent in the second quarter, and may slightly rise to 7 percent-7.1 percent in the third quarter, indicating limited room for the central bank to further reduce the interest rate.
Stocks in nonferrous metals, agricultural, chemical, military, pharmaceutical and food and beverage sectors are expected to see trading opportunities in the second and third quarter of 2015, said the fund manager in the report.
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