6. Successive rate cuts boost liquidity

On Oct 23, the People's Bank of China, the central bank, announced a 25-basis-points cut in the one-year benchmark lending rate to 4.35 percent, effective from Oct 24.

The one-year benchmark deposit rate was also lowered by 25 bps to 1.5 percent.

In addition, the central bank reduced the renminbi reserve requirement ratio by 50 bps for financial institutions, some of which were granted another 50 bps drop.

This was the fifth RRR cut and the fourth rate cut since the beginning of 2015, aimed at creating favorable conditions for China's economic restructuring and to ensure steady economic growth.

The credit easing in 2015 sent China into a low-lending-rate cycle, which shall benefit real economy in the long run.

Analysts said the double cuts will benefit the stock market as they will boost liquidity and help the market to revive after the summer rout.