WASHINGTON (Sputnik) — "The latest episode of stock market turmoil in China — the second since mid-2015 — suggests that the Chinese authorities are finding it increasingly difficult to reconcile the tensions inherent in designing and implementing credible and effective reform measures while maintaining economic, financial and social stability," the release stated.
Nevertheless, Beijing is likely to face further financial market volatility based on uncertain methods and pace of reforms. Moody’s claimed that the measures the Chinese government has taken to stabilize its stock market have not been effective.
However, "a further marked slowdown in commodity, construction and heavy industry sectors will be offset by significant fiscal and monetary stimulus," the release added.
Thursday's seven percent fall at the Shanghai and Shenzhen stock exchanges triggered the new Chinese stock market circuit-breaker mechanism for the second time this week, causing a knock-on effect across the world. China's trade suspension was followed by Wall Street sliding one percent and European stock markets slumping by two percent late Thursday afternoon.