Index rallies to end six-day losing run
By Hu Xiaocen and Lu Nengneng |
December 17, 2011, Saturday
|
Print Edition
Print Edition
SHANGHAI shares rebounded yesterday from their lowest in 33 months, snapping a six-day retreat for the benchmark index, as authorities called for trillions of yuan in investment to bolster the stock market.
The Shanghai Composite Index jumped 2 percent to 2,224.84 points, the biggest gain in two weeks. The gauge slid 3.9 percent this week, the sixth weekly losses in a row.
Guo Shuqing, chairman of the China Securities Regulatory Committee, said at a forum on Thursday that pension and housing funds should follow social security funds and invest in stock markets.
Guo suggested entrusting the 2 trillion yuan (US$ 315 billion) of pension funds and 2.1 trillion yuan of housing funds to a delegated institution, and investing the money in the capital market to benefit all Chinese residents.
"Though his speech may not necessarily signal any substantial action to revive the market, it did indicate the government's concerns over the recent tumbles," Jiang Shiqin, analyst with Industrial Securities, said.
Banks rose across the board on speculation that the central bank will further loosen monetary policy to provide them with liquidity.
Huaxia Bank jumped 4.8 percent to close at 11.26 yuan. The Industrial and Commercial Bank of China, the nation's biggest bank, rose 1.5 percent to end at 4.17 yuan.
Despite the rally, Hao Hong, strategist at China International Capital Corp, warned of possible downturn in the foreseeable future.
"Chinese stocks will struggle next year as the government is unlikely to loosen monetary policy aggressively," Hao predicted.
The Shanghai Composite Index jumped 2 percent to 2,224.84 points, the biggest gain in two weeks. The gauge slid 3.9 percent this week, the sixth weekly losses in a row.
Guo Shuqing, chairman of the China Securities Regulatory Committee, said at a forum on Thursday that pension and housing funds should follow social security funds and invest in stock markets.
Guo suggested entrusting the 2 trillion yuan (US$ 315 billion) of pension funds and 2.1 trillion yuan of housing funds to a delegated institution, and investing the money in the capital market to benefit all Chinese residents.
"Though his speech may not necessarily signal any substantial action to revive the market, it did indicate the government's concerns over the recent tumbles," Jiang Shiqin, analyst with Industrial Securities, said.
Banks rose across the board on speculation that the central bank will further loosen monetary policy to provide them with liquidity.
Huaxia Bank jumped 4.8 percent to close at 11.26 yuan. The Industrial and Commercial Bank of China, the nation's biggest bank, rose 1.5 percent to end at 4.17 yuan.
Despite the rally, Hao Hong, strategist at China International Capital Corp, warned of possible downturn in the foreseeable future.
"Chinese stocks will struggle next year as the government is unlikely to loosen monetary policy aggressively," Hao predicted.
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