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Banks and developers lead decline on reserve rate rise
By Feng Jianmin |
June 15, 2011, Wednesday
|
Online Edition
Online Edition
SHANGHAI'S key stock index fell today as the central bank asked banks to put aside more money from lending after the market closed yesterday.
The benchmark Shanghai Composite Index lost 0.9 percent to 2,705.43 points. Turnover fell to 86 billion yuan (US$ 13.3 billion) from yesterday's 96 billion yuan.
The sixth increase of reserve requirement ratio this year will take effect next Monday, and commercial banks will have to set aside a record 21.5 percent of their funds at the central bank, making less money available for lending.
The central bank said in a report yesterday that it will make more efforts to stabilize prices and create suitable a monetary environment to tame inflation and control the property market.
Banks led the decliners. Agricultural Bank of China lost 0.4 percent to 2.72 yuan. Pudong Development Bank dropped 1.9 percent to 9.72 yuan.
Property developers dropped after Standard & Poor downgraded the outlook for the sector from stable to negative as tighter credit and further government curbs may drive home prices 10 percent lower in the next 12 months. China Vanke lost 1.2 percent 8.07 yuan. Gemdale Corp fell 1.6 percent to 6.09 yuan.
The benchmark Shanghai Composite Index lost 0.9 percent to 2,705.43 points. Turnover fell to 86 billion yuan (US$ 13.3 billion) from yesterday's 96 billion yuan.
The sixth increase of reserve requirement ratio this year will take effect next Monday, and commercial banks will have to set aside a record 21.5 percent of their funds at the central bank, making less money available for lending.
The central bank said in a report yesterday that it will make more efforts to stabilize prices and create suitable a monetary environment to tame inflation and control the property market.
Banks led the decliners. Agricultural Bank of China lost 0.4 percent to 2.72 yuan. Pudong Development Bank dropped 1.9 percent to 9.72 yuan.
Property developers dropped after Standard & Poor downgraded the outlook for the sector from stable to negative as tighter credit and further government curbs may drive home prices 10 percent lower in the next 12 months. China Vanke lost 1.2 percent 8.07 yuan. Gemdale Corp fell 1.6 percent to 6.09 yuan.
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