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Index recoups morning losses
By Feng Jianmin and Hu Xiaocen |
December 20, 2011, Tuesday
|
Print Edition
Print Edition
SHANGHAI'S key stock index yesterday recouped most of its losses from the morning session but still ended slightly lower as hopes for easier monetary policies were offset by falling home prices and the death of North Korea's leader.
The Shanghai Composite Index dipped 0.3 percent to 2,218.24, following a 2.6 percent fall to 2,167.68 in the morning.
Home prices in more than half of the major cities in China fell further in November, according to data released by the National Statistics Bureau on Sunday.
New home prices in 49 of China's 70 biggest cities fell in November from October, the bureau said, and prices among major cities fell by 0.35 percent monthly.
The Shanghai bourse performed weakly taking its cue from tumbles in Asian markets on speculation that North Korean leader Kim Jong Il's death on Saturday may fuel instability in the region.
Property developers rebounded in the afternoon session. Gemdale Corp rose 1.9 percent to 4.86 yuan. Poly Real Estate Co edged up 0.8 percent to 10.06 yuan.
"China's restraining measures on the property market are set to continue in the next year," said Cao Xute, an analyst with Sinolink Securities. "But the valuation of the sector is very low, and possible cuts in reserve requirement ratio and mortgage rate for first homes may lift developers' shares prices."
A 27.9 billion yuan decrease in yuan funds in November from October in Chinese banks also fueled speculation that the central bank may soon cut reserve requirements for them to boost liquidity.
"As the amount of money maturing in the open market operations is low and yuan funds continue to fall, the central bank may cut reserve requirement ratio in early January to meet increasing demand for liquidity before the Spring Festival," said Feng Yuming, an analyst with Orient Securities.
The 15-day festival, which starts on January 23, is China's biggest holiday.
The Shanghai Composite Index dipped 0.3 percent to 2,218.24, following a 2.6 percent fall to 2,167.68 in the morning.
Home prices in more than half of the major cities in China fell further in November, according to data released by the National Statistics Bureau on Sunday.
New home prices in 49 of China's 70 biggest cities fell in November from October, the bureau said, and prices among major cities fell by 0.35 percent monthly.
The Shanghai bourse performed weakly taking its cue from tumbles in Asian markets on speculation that North Korean leader Kim Jong Il's death on Saturday may fuel instability in the region.
Property developers rebounded in the afternoon session. Gemdale Corp rose 1.9 percent to 4.86 yuan. Poly Real Estate Co edged up 0.8 percent to 10.06 yuan.
"China's restraining measures on the property market are set to continue in the next year," said Cao Xute, an analyst with Sinolink Securities. "But the valuation of the sector is very low, and possible cuts in reserve requirement ratio and mortgage rate for first homes may lift developers' shares prices."
A 27.9 billion yuan decrease in yuan funds in November from October in Chinese banks also fueled speculation that the central bank may soon cut reserve requirements for them to boost liquidity.
"As the amount of money maturing in the open market operations is low and yuan funds continue to fall, the central bank may cut reserve requirement ratio in early January to meet increasing demand for liquidity before the Spring Festival," said Feng Yuming, an analyst with Orient Securities.
The 15-day festival, which starts on January 23, is China's biggest holiday.
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