Mainland stocks lost ground again on Thursday, erasing much of the previous day's gains, but the overall market sentiment remains relatively upbeat, despite concerns about the effect of a potential rise in interest rates in the US later this year. 

The US Federal Reserve offered no clear timetable for a possible rate rise in a statement released on Wednesday, but it did mention the more positive outlook for the US economy, citing "solid job gains and declining unemployment." This bullish attitude reinforced expectations that a first rise in key interest rates in almost a decade might come as early as September.

The policy statement seemed to go down well with US investors, as stocks finished higher on Wednesday. However, Asian stock markets saw mixed performance on Thursday.

There is little reason to believe that the Fed's policy statement could have taken a toll on mainland stocks, which tumbled in the final hour of trading in the afternoon session.

The concern over a potential rise in US interest rates is based on the possibility that it could prompt capital outflows from China, in search of higher returns in the US market, as this would have a negative effect on liquidity in the domestic market.

But any such impact is expected to be very limited.

If an interest rate hike in the US sparks large-scale capital outflows from the country, China's central bank can still provide timely liquidity support via multiple monetary policy tools.

So the Fed's decision on US interest rates won't have a big impact on the mainland's stock market, as any negative influence it does have can be countered.

The recent sharp correction and mild rebound in mainland equities reveal a regulatory apparatus that is learning how to foster steady and rational corporate and investor behavior through effective public communication, clearly defined market-driven mechanisms and proper law enforcement.

Earlier in July, Deputy Finance Minister Zhu Guangyao stated that Chinese regulators need to draw lessons from this market correction and learn from the experience of other countries and regions.

We hope this means that A-shares may be more in sync with global legal and risk management practices sometime down the road.

The article was based on an interview with Zhang Bin, a research fellow with the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, and a research report by Nomura China strategists led by Wendy Liu. bizopinion@globaltimes.com.cn