ReutersThe headquarters of the People's Bank of China in Beijing.An unexpected interest rate cut by China’s central bank has triggered a rally for stocks around the world, and analysts say more easing is likely soon, as Beijing has little choice in the matter. Friday’s move by the People’s Bank of China (PBOC) — including a quarter-point cut to the one-year deposit rate and a 40 basis-point (4/10ths of a percentage point) cut in one-year lending rate — has come as a surprise for many analysts, as the central bank had been more focused on unconventional monetary easing over the past two years. “It seems to us that the PBOC has been forced to cut rates in response to the sharp slowdown,” Merrill Lynch said in a note on Monday. Also possibly influencing the timing of the move, the Merrill analysts said, was the “lackluster launch of Shanghai-Hong Kong Stock Connect” program last week. Shanghai stocks fell following the launch of the program — which allows direct trading of Shanghai shares from investors outside mainland China — and Merrill said the equities market was also a concern to policy makers. As for the impact of the rate cut, it may be positive for big state-owned enterprises and mortgage borrowers, while small and medium-sized enterprises may also benefit from the lower rates and looser liquidity conditions overall, Merrill Lynch said. In fact, the PBOC may have acted precisely to help ease the worsening financing conditions for Chinese companies, J.P. Morgan analysts said. “This reflects ... [the government’s] desperate efforts to lower the funding cost for the corporate sector,” J.P. Morgan said in a recent note, adding that the Chinese government’s recent efforts to bring down lending rates via liquidity injections and other smaller moves have not been very “effective.” Providing some support to this theory is the fact that China’s cabinet, the State Council, last week issued 10 measures seeking to alleviate the high funding costs facing companies.More to come Several of the banks’ analysts also said the move suggested more easing in the near term. J.P. Morgan said they saw the move as “a signal of policy shift towards more aggressive monetary easing,” including “at least one more rate-cut in the coming quarters,” and possible other measures like trimming the amount of money banks must keep in reserves. That view was supported by a Reuters report out Sunday which quoted anonymous sources “involved in policy-making” as saying the PBOC is ready to cut rates again, as well as further loosening lending restrictions. Goldman Sachs analysts, meanwhile, forecast fresh action on the fiscal side, as well as administrative measures. The central government could step up fiscal-expenditure allocation and add more pressure on local government to act to support the economy, especially via “speeding up infrastructure construction,” Goldman Sachs said. China’s economy has suffered from slowing export growth, and recently tight domestic liquidity conditions, and even the factory shutdowns related to controlling pollution for the recent Asia-Pacific Economic Cooperation summit in Beijing, Goldman Sachs said. The investment bank’s analysts also expressed approval for the PBOC’s raising the limit on interest offered for deposits, which was raised by 1/10th of a percentage point alongside Friday’s rate cut. The move represents a “positive step” in China’s interest-rate liberalization, Goldman Sachs said. The U.S. and European markets advanced on Friday after the PBOC move, while Asian markets rallied on Monday. Laura He