Investors hang on for a roller coaster ride

Shanghai drops 1.64% and Hong Kong falls 2.16% as regulators leave markets on edge

Markets in Shanghai and Hong Kong had a roller coaster ride on Monday as investors struggled to get to grips with the intentions of the central bank and securities regulator.

The People's Bank of China decided to cut the amount of cash that lenders must hold as required reserve by 1 percentage point on Sunday. It was the second industry-wide cut in two months and the largest since November 2008. The decision will release liquidity of at least 1.2 trillion yuan ($194 billion) to boost economic growth.