Fund injection helps index’s recovery
Print Edition
SHANGHAI stocks yesterday recovered from its lowest level in over five months as China’s borrowing costs fell after the central bank injected liquidity into the market.
The Shanghai Composite Index added 0.86 percent, or 17.06 points, to 2,008.31.
The People’s Bank of China yesterday injected 75 billion yuan (US$12.4 billion) into the banking system via seven-day reverse repurchase agreements and another 180 billion yuan through 21-day repos, it said in a statement on its website.
The seven-day Shanghai Interbank Offered Rate (Shibor), a gauge of funding costs, fell 79.4 basis points to 5.54 percent after the liquidity injection, data from the National Interbank Funding Center showed.
“Investors now are very sensitive to the fluctuation of money rates after China’s capital market experienced two liquidity crises last year,” CITIC Securities said in a note.
The index fell below 2,000 points on Monday on rising borrowing costs and data showing economic growth easing.
Shanghai Pudong Development Bank added 1 percent to 9.16 yuan. The Industrial Bank rose 0.9 percent to 9.29 yuan.
CITIC Securities, China’s biggest listed brokerage, gained 1.7 percent to 11.71 yuan. Haitong Securities climbed 2.5 percent to end at 10.44 yuan.
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