Index rallies on PBOC's injection
By Hu Xiaocen |
January 20, 2012, Friday
|
Print Edition
Print Edition
SHANGHAI stocks rebounded yesterday from Wednesday's loss as the People's Bank of China injected more liquidity to the capital market.
The Shanghai Composite Index gained 1.3 percent to close at 2,296.08.
The central bank conducted a reverse repurchase of bills worth 183 billion yuan (US$29 billion) from banks yesterday, according to the announcement on its website.
To keep market liquidity at a reasonable level, the PBOC usually repurchases bills from lenders every Tuesday and Thursday, but it reportedly bought back bills also on Monday and Wednesday without disclosing the actual sums this week judging by the recent high levels of Shanghai's interbank offered rates.
This liquidity pumping boosted banks. The Industrial and Commercial Bank of China, the nation's largest lender, jumped 1.2 percent to 4.36 yuan. The Bank of China added 1 percent to 3.01 yuan, and China Merchants Bank rose 1.4 percent to 12.70 yuan.
But GF Securities said the liquidity injection may help the stock market rebound temporarily as its long-term performance still depended on the direction of the country's economy.
Jiangxi Copper, the largest producer of the metal in China, rose 2.3 percent to 25.6 yuan. China Shenhua Energy Co added 0.8 percent to 27.1 yuan.
The Shanghai Composite Index gained 1.3 percent to close at 2,296.08.
The central bank conducted a reverse repurchase of bills worth 183 billion yuan (US$29 billion) from banks yesterday, according to the announcement on its website.
To keep market liquidity at a reasonable level, the PBOC usually repurchases bills from lenders every Tuesday and Thursday, but it reportedly bought back bills also on Monday and Wednesday without disclosing the actual sums this week judging by the recent high levels of Shanghai's interbank offered rates.
This liquidity pumping boosted banks. The Industrial and Commercial Bank of China, the nation's largest lender, jumped 1.2 percent to 4.36 yuan. The Bank of China added 1 percent to 3.01 yuan, and China Merchants Bank rose 1.4 percent to 12.70 yuan.
But GF Securities said the liquidity injection may help the stock market rebound temporarily as its long-term performance still depended on the direction of the country's economy.
Jiangxi Copper, the largest producer of the metal in China, rose 2.3 percent to 25.6 yuan. China Shenhua Energy Co added 0.8 percent to 27.1 yuan.
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