Fears over tighter monetary policy pull index to end down
By Richard Fu and Feng Jianmin |
November 3, 2010, Wednesday
|
Print Edition
Print Edition
SHANGHAI'S key stock index edged down on concerns over the possibility of a tighter monetary policy, while steel stocks gained on a stable demand outlook.
The Shanghai Composite Index dipped 0.3 percent to 3,045.4. Turnover grew to a two-week high at 306.5 billion yuan (US$ 45.9 billion) from yesterday's 254 billion yuan.
A China Business News report said yesterday the government may cut money supply next year as it may shift monetary policy from "moderately loose" to "sound."
"Monetary policy may shift once the economic growth is stable," Li Daokui, an economist with the People's Bank of China, commented on the report at a financial forum held in Beijing yesterday. "There is risk of asset bubble amid huge liquidity."
Wang Zhihong, an analyst at Datong Securities, said that he expects more intense fluctuations in November on concerns about tightening measures to curb inflation.
Elsewhere, India and Australia surprised markets by raising interest rates yesterday to rein in inflation.
In the United States, analysts are expecting the Fed to announce it will spend US$500 billion to purchase US government bonds, which means pouring more money into the American economy in an effort to spur consumer spending and bank lending. The market is likely to decline if the amount of money released missed expectations.
Banks were mixed amid a tighter monetary policy outlook. The Industrial and Commercial Bank of China was unchanged at 4.44 yuan. The Bank of Communications lost 0.8 percent to 6.17 yuan.
Baoshan Iron and Steel Co added 1.9 percent to 7.43 yuan, leading gains in the steel sector, after its general manager said yesterday China's steel demand will be steady next year. Wuhan Iron and Steel Co rose 2.12 percent to 5.29 yuan.
The Shanghai Composite Index dipped 0.3 percent to 3,045.4. Turnover grew to a two-week high at 306.5 billion yuan (US$ 45.9 billion) from yesterday's 254 billion yuan.
A China Business News report said yesterday the government may cut money supply next year as it may shift monetary policy from "moderately loose" to "sound."
"Monetary policy may shift once the economic growth is stable," Li Daokui, an economist with the People's Bank of China, commented on the report at a financial forum held in Beijing yesterday. "There is risk of asset bubble amid huge liquidity."
Wang Zhihong, an analyst at Datong Securities, said that he expects more intense fluctuations in November on concerns about tightening measures to curb inflation.
Elsewhere, India and Australia surprised markets by raising interest rates yesterday to rein in inflation.
In the United States, analysts are expecting the Fed to announce it will spend US$500 billion to purchase US government bonds, which means pouring more money into the American economy in an effort to spur consumer spending and bank lending. The market is likely to decline if the amount of money released missed expectations.
Banks were mixed amid a tighter monetary policy outlook. The Industrial and Commercial Bank of China was unchanged at 4.44 yuan. The Bank of Communications lost 0.8 percent to 6.17 yuan.
Baoshan Iron and Steel Co added 1.9 percent to 7.43 yuan, leading gains in the steel sector, after its general manager said yesterday China's steel demand will be steady next year. Wuhan Iron and Steel Co rose 2.12 percent to 5.29 yuan.
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