Index hits biggest daily rise in 2 months
Print Edition
SHANGHAI stocks posted the biggest daily gain in two months yesterday as funding costs continued to drop after the central bank injected liquidity.
The Shanghai Composite Index increased 2.2 percent, or 43.44 points, to 2,051.75.
“The easing of the cash crunch is the main reason that pushed the index up,” said Dongguan Securities.
The seven-day Shanghai Interbank Offered Rate, a gauge of funding costs, fell for a second day yesterday by 31.1 basis points to 5.2 percent, according to the National Interbank Funding Center.
The People’s Bank of China on Tuesday injected 255 billion yuan (US$41.8 billion) into the banking system through reverse repurchase agreements. It also provided liquidity to small and medium-sized banks through its Standing Lending Facility.
“The funds injected are more than expected and the use of 21-day repos to cover the coming Spring Festival holiday effectively alleviated liquidity risks,” CITIC Securities said in a note yesterday.
Meanwhile, the record low valuation of the property sector helped propel Poly Real Estate, China’s second-largest listed developer, 7.3 percent to 8.09 yuan. Gemdale Corp rose 4.9 percent to 6.20 yuan, and Gree Real Estate Co jumped by the daily limit of 10 percent to close at 8.68 yuan.
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