Another day of decline for key index
By Feng Jianmin |
August 31, 2011, Wednesday
|
Print Edition
Print Edition
SHANGHAI'S key stock index yesterday fell for the third day yesterday on concerns that continued tightening measures may drain liquidity and threaten the profitability of small firms.
The Shanghai Composite Index edged down 0.4 percent to 2,566.59 points after rising as much as 1.5 percent in the morning session.
Concerns that the People's Bank of China will not ease monetary policy deepened after the National Development and Reform Commission, China's top economics planning body, said in a report that prices in the country will remain high amid excessive global liquidity and domestic natural disasters.
Market liquidity is also seen to tighten as banks are required to put aside more money as reserves from next Monday. The central bank has notified commercial banks to include margin deposits in the reserves, and the market expects 900 billion yuan (US$141 billion) to be drained out of the economy.
"The notice to include margin deposits in the reserves continues to impact the market, and we expect tight liquidity to continue," said Cao Xuefeng, an analyst at Huaxi Securities.
Most of cement makers dropped. Huaxin Cement Co shed 2.9 percent to 22.75 yuan.
China Construction Bank rose 0.9 percent to 4.54 yuan after Bank of America agreed to sell 13.1 billion CCB shares for US$8.3 billion.
The Shanghai Composite Index edged down 0.4 percent to 2,566.59 points after rising as much as 1.5 percent in the morning session.
Concerns that the People's Bank of China will not ease monetary policy deepened after the National Development and Reform Commission, China's top economics planning body, said in a report that prices in the country will remain high amid excessive global liquidity and domestic natural disasters.
Market liquidity is also seen to tighten as banks are required to put aside more money as reserves from next Monday. The central bank has notified commercial banks to include margin deposits in the reserves, and the market expects 900 billion yuan (US$141 billion) to be drained out of the economy.
"The notice to include margin deposits in the reserves continues to impact the market, and we expect tight liquidity to continue," said Cao Xuefeng, an analyst at Huaxi Securities.
Most of cement makers dropped. Huaxin Cement Co shed 2.9 percent to 22.75 yuan.
China Construction Bank rose 0.9 percent to 4.54 yuan after Bank of America agreed to sell 13.1 billion CCB shares for US$8.3 billion.
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