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Shanghai index rises despite interest rate hike
By Lydia Chen |
December 27, 2010, Monday
|
Online Edition
Online Edition
SHANGHAI'S key stock index jumped in the morning session today, beating analysts' expectations that the market may extend losses over a latest interest rates hike.
The Shanghai Composite Index gained 0.70 percent, or 19.75 points, to 2,854.91 this morning. Turnover climbed to 62.95 billion yuan (US$9.4 billion) from 54.9 billion yuan on Friday morning.
Commodity shares and coal producers led the increase, indicating investors' confidence in China's economy despite frequent tightening monetary policies to tame inflation.
Yanzhou Coal Mining Co hiked 4.17 percent to 29.26 yuan while Xishan Coal & Electricity Power Group Co surged 4.63 percent to 27.34 yuan.
Jiangxi Copper Co rose 3.19 percent to 42.65 yuan. Yunnan Tin Co added 2.66 percent to 32.01 yuan.
The People's Bank of China announced on Saturday a rise in its benchmark one-year lending rate by 25 basis points to 5.81 percent, and the one-year deposit rate the same amount to 2.75 percent.
This is the second rate rise within two months as the government ratchets up to deploy more monetary weapons to tame stubbornly rising inflation.
Chinese Premier Wen Jiabao yesterday pledged in a ratio interview that his government will be able to keep inflation in check next year, raising speculations in the market that there may be more rate increase coming, which could be a positive sign to the market.
Despite the interest rate hike, large banks and insurers rose in the morning session.
Industrial & Commercial Bank of China Ltd, the nation's biggest listed lender, rose 0.48 percent to 4.20 yuan. China Construction Bank Corp., the second biggest, added 0.21 percent to 4.70 yuan. China Life Insurance Co, the biggest insurer, advanced 1.12 percent to 22.50 yuan.
The Shanghai Composite Index gained 0.70 percent, or 19.75 points, to 2,854.91 this morning. Turnover climbed to 62.95 billion yuan (US$9.4 billion) from 54.9 billion yuan on Friday morning.
Commodity shares and coal producers led the increase, indicating investors' confidence in China's economy despite frequent tightening monetary policies to tame inflation.
Yanzhou Coal Mining Co hiked 4.17 percent to 29.26 yuan while Xishan Coal & Electricity Power Group Co surged 4.63 percent to 27.34 yuan.
Jiangxi Copper Co rose 3.19 percent to 42.65 yuan. Yunnan Tin Co added 2.66 percent to 32.01 yuan.
The People's Bank of China announced on Saturday a rise in its benchmark one-year lending rate by 25 basis points to 5.81 percent, and the one-year deposit rate the same amount to 2.75 percent.
This is the second rate rise within two months as the government ratchets up to deploy more monetary weapons to tame stubbornly rising inflation.
Chinese Premier Wen Jiabao yesterday pledged in a ratio interview that his government will be able to keep inflation in check next year, raising speculations in the market that there may be more rate increase coming, which could be a positive sign to the market.
Despite the interest rate hike, large banks and insurers rose in the morning session.
Industrial & Commercial Bank of China Ltd, the nation's biggest listed lender, rose 0.48 percent to 4.20 yuan. China Construction Bank Corp., the second biggest, added 0.21 percent to 4.70 yuan. China Life Insurance Co, the biggest insurer, advanced 1.12 percent to 22.50 yuan.
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