Index heads south on tight liquidity
By Feng Jianmin |
May 25, 2011, Wednesday
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Print Edition
Print Edition
SHANGHAI'S key stock index closed slightly lower yesterday on tight liquidity.
The benchmark Shanghai Composite Index was down 0.3 percent to 2,767.06.
Liquidity usually tightens when companies prepare to make their tax payments by the end of May. The seven-day repurchase rate, an indication of borrowing cost among banks, rose for the fourth day to a one-week high of 4.73 percent, according to the National Interbank Funding Center.
Banks led the decliners. The Industrial and Commercial Bank of China dipped 0.5 percent to 4.44 yuan. The Agricultural Bank of China lost 0.7 percent to 2.85 yuan.
Copper producers were weak as metal prices were weighed by concerns over economic conditions in China and Europe.
"The base metals complex has started the week under heavy pressure from a combination of a stronger dollar, weaker Chinese equity markets and a fall in Chinese manufacturing growth," South Africa's Standard Bank wrote in a report.
"Fears over the European debt crisis have also resurfaced, triggering a fresh round of risk aversion."
Yunnan Copper Co slid 1.2 percent to 21.61 yuan. But gold miners gained because of inflation worries.
Shandong Gold Mining Co rose 2.7 percent to 45.72 yuan. Zijin Mining Co gained 1.3 percent to 7.09 yuan.
ChiNext, the Chinese equivalent of Nasdaq, led a strong rebound in the afternoon session to lift the market up from a tumble of more than 1 percent.
The ChiNext index rose 3.6 percent, more than offsetting a 2.9 loss percent on Monday.
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