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Key index climbs the most in 2 weeks
By Lydia Chen |
September 8, 2011, Thursday
|
Print Edition
Print Edition
SHARES in Shanghai yesterday snapped a four-day losing streak and rose the most in two weeks, with financial counters leading gainers on expectations that China might ease its monetary tightening.
The Shanghai Composite Index gained 1.8 percent, the most since August 25, to 2,516.09 points. The index had retreated 3.8 percent in the past four days.
"If China's macro-economic policy is not going to change, these gains may only be a short-term recovery, not a rebound," said Yuan Jianxin, an analyst with Changjiang Securities.
Jing Ulrich, JPMorgan's managing director and chairman of global markets for China, said in Hong Kong at a press conference on Tuesday that China will shift to a "neutral" monetary policy from tightening if inflation starts to peak.
Financial shares were lifted by a front-page editorial in China Securities Journal yesterday which said there were growing hopes in the market that the central bank may lower its bank reserve requirement ratio for some or all banks to ease liquidity in the market.
Chinese banks have to put aside a total of about 900 billion yuan (US$140.75 billion) in the next six months after the People's Bank of China widened the base of reserve requirement ratio to include margin deposits, which is equivalent to up to three increases in the ratio, the editorial said.
The Industrial and Commercial Bank of China, largest lender, added 1.2 percent to 4.12 yuan. China Minsheng Banking Corp gained 3.1 percent to end at 6 yuan.
The Shanghai Composite Index gained 1.8 percent, the most since August 25, to 2,516.09 points. The index had retreated 3.8 percent in the past four days.
"If China's macro-economic policy is not going to change, these gains may only be a short-term recovery, not a rebound," said Yuan Jianxin, an analyst with Changjiang Securities.
Jing Ulrich, JPMorgan's managing director and chairman of global markets for China, said in Hong Kong at a press conference on Tuesday that China will shift to a "neutral" monetary policy from tightening if inflation starts to peak.
Financial shares were lifted by a front-page editorial in China Securities Journal yesterday which said there were growing hopes in the market that the central bank may lower its bank reserve requirement ratio for some or all banks to ease liquidity in the market.
Chinese banks have to put aside a total of about 900 billion yuan (US$140.75 billion) in the next six months after the People's Bank of China widened the base of reserve requirement ratio to include margin deposits, which is equivalent to up to three increases in the ratio, the editorial said.
The Industrial and Commercial Bank of China, largest lender, added 1.2 percent to 4.12 yuan. China Minsheng Banking Corp gained 3.1 percent to end at 6 yuan.
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