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Banks and property shares pull index up
By Lydia Chen |
November 25, 2011, Friday
|
Print Edition
Print Edition
SHANGHAI'S key stock index rose yesterday for the first time in seven trading days, helped by a bout of short covering in previously oversold blue chips.
The Shanghai Composite Index edged up 0.1 percent to 2,397.55 points.
Gains by shares of financial firms and real estate developers helped the index rebound following its longest-losing streak in six months as investors speculated that the central government may ease its monetary tightening measures.
The Industrial and Commercial Bank of China rose 0.9 percent to 4.28 yuan (67 US cents). Poly Real Estate gained 2.9 percent to 9.17 yuan, and China Life Insurance jumped 3.3 percent to 17.84 yuan.
The People's Bank of China, the central bank, has lowered reserve requirement ratios for more than 20 rural cooperative banks by half a percentage point, raising hopes that the ratios for all banks will be cut later.
The cut reduces the percentage of deposits that the cooperative banks are required to park with the central bank to 16 percent, a move described by the central bank as a "normalization" after an increase a year ago.
China is likely to lower the ratio from a record high before the end of this year and also cut interest rates in the first quarter of next year, said Jiang Chao, an analyst at Guotai Junan Securities Co.
But Wang Tao, chief China economist of UBS AG, said there may not be any change to monetary tightening in the next 12 months.
The Shanghai Composite Index edged up 0.1 percent to 2,397.55 points.
Gains by shares of financial firms and real estate developers helped the index rebound following its longest-losing streak in six months as investors speculated that the central government may ease its monetary tightening measures.
The Industrial and Commercial Bank of China rose 0.9 percent to 4.28 yuan (67 US cents). Poly Real Estate gained 2.9 percent to 9.17 yuan, and China Life Insurance jumped 3.3 percent to 17.84 yuan.
The People's Bank of China, the central bank, has lowered reserve requirement ratios for more than 20 rural cooperative banks by half a percentage point, raising hopes that the ratios for all banks will be cut later.
The cut reduces the percentage of deposits that the cooperative banks are required to park with the central bank to 16 percent, a move described by the central bank as a "normalization" after an increase a year ago.
China is likely to lower the ratio from a record high before the end of this year and also cut interest rates in the first quarter of next year, said Jiang Chao, an analyst at Guotai Junan Securities Co.
But Wang Tao, chief China economist of UBS AG, said there may not be any change to monetary tightening in the next 12 months.
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