Blue chips to the fore as index goes north
By Feng Jianmin |
March 5, 2011, Saturday
|
Print Edition
Print Edition
SHANGHAI'S key stock index yesterday rose by the most in three weeks, led by blue chips after money rate indicated abundant market liquidity.
The Shanghai Composite Index added 1.4 percent to 2,942.31. The benchmark was up 2.2 percent this week amid sufficient money flow.
The seven-day repurchase rate, a gauge measuring the cost of borrowing among banks and indicating availability of money, fell 23 basis points to 2.22 percent in Shanghai yesterday, the lowest level since December 7.
"Market has seen abundant liquidity, and the central bank is very likely to raise the reserve requirement ratio shortly," said Kou Wenhong, an analyst of China Nature Asset Management Co. "But it is a regular measure to withdraw liquidity and will not impact the market significantly."
He said the market is likely to gain through fluctuations this month, because expectations for slower economic growth have already been digested, and the annual session of the National People's Congress may bring good news for industries such as environmental protection and agriculture.
Steel makers led the gainers after reports China will support development of wheels for high-power trains, which now rely heavily on imports.
Maanshan Iron and Steel, which has produced the first batch of such wheels, jumped 7.7 percent to 3.92 yuan. Wuhan Iron and Steel Co rose 2.4 percent to 4.67 yuan.
The Shanghai Composite Index added 1.4 percent to 2,942.31. The benchmark was up 2.2 percent this week amid sufficient money flow.
The seven-day repurchase rate, a gauge measuring the cost of borrowing among banks and indicating availability of money, fell 23 basis points to 2.22 percent in Shanghai yesterday, the lowest level since December 7.
"Market has seen abundant liquidity, and the central bank is very likely to raise the reserve requirement ratio shortly," said Kou Wenhong, an analyst of China Nature Asset Management Co. "But it is a regular measure to withdraw liquidity and will not impact the market significantly."
He said the market is likely to gain through fluctuations this month, because expectations for slower economic growth have already been digested, and the annual session of the National People's Congress may bring good news for industries such as environmental protection and agriculture.
Steel makers led the gainers after reports China will support development of wheels for high-power trains, which now rely heavily on imports.
Maanshan Iron and Steel, which has produced the first batch of such wheels, jumped 7.7 percent to 3.92 yuan. Wuhan Iron and Steel Co rose 2.4 percent to 4.67 yuan.
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