City index rises amid speculation of easing
By Lu Nengneng |
April 14, 2012, Saturday
|
Print Edition
Print Edition
SHANGHAI'S stock market yesterday rose to a three-week high, as China's slowing economic growth in the first quarter fueled speculation the government will ease monetary policy.
The benchmark Shanghai Composite Index rose 0.35 percent to 2,359.16 points, its highest close since March 22. The index gained 2.28 percent this week, a second weekly gain.
China's gross domestic product growth decelerated to 8.1 percent in the first quarter of this year, the slowest in almost three years, the National Bureau of Statistics said yesterday.
The expectation of more monetary easing to reverse the economic downturn had mixed effects on bank stocks.
The Bank of China gained 0.3 percent to 3.06 yuan (49 US cents), and the Bank of Communications price rose 0.4 percent to 4.74 yuan. But China Construction Bank shed 0.4 percent, falling to 4.74 yuan.
Sun Jianbo, chief strategy analyst at Galaxy Securities, said in a note that history shows stock market performance improves as the money supply growth rebounds from historical low.
M2, the broadest measure of money supply, increased 13.4 percent in China in March, 0.4 percentage point higher than in February.
Material producers and energy suppliers paced the advance after the new loans in March, which surged to a 14-month high, signaled a credit relaxation, which may lead to the expansion of industrial activities.
Jiangxi Copper, the nation's biggest producer of the metal, gained 0.7 percent to 25.16 yuan, while China Shenhua Energy jumped up 0.8 percent to 26.45 yuan. Zijin Mining Industry added 0.9 percent to 4.32 yuan.
The benchmark Shanghai Composite Index rose 0.35 percent to 2,359.16 points, its highest close since March 22. The index gained 2.28 percent this week, a second weekly gain.
China's gross domestic product growth decelerated to 8.1 percent in the first quarter of this year, the slowest in almost three years, the National Bureau of Statistics said yesterday.
The expectation of more monetary easing to reverse the economic downturn had mixed effects on bank stocks.
The Bank of China gained 0.3 percent to 3.06 yuan (49 US cents), and the Bank of Communications price rose 0.4 percent to 4.74 yuan. But China Construction Bank shed 0.4 percent, falling to 4.74 yuan.
Sun Jianbo, chief strategy analyst at Galaxy Securities, said in a note that history shows stock market performance improves as the money supply growth rebounds from historical low.
M2, the broadest measure of money supply, increased 13.4 percent in China in March, 0.4 percentage point higher than in February.
Material producers and energy suppliers paced the advance after the new loans in March, which surged to a 14-month high, signaled a credit relaxation, which may lead to the expansion of industrial activities.
Jiangxi Copper, the nation's biggest producer of the metal, gained 0.7 percent to 25.16 yuan, while China Shenhua Energy jumped up 0.8 percent to 26.45 yuan. Zijin Mining Industry added 0.9 percent to 4.32 yuan.
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