Key index climbs the most in a month
By Feng Jianmin |
August 16, 2011, Tuesday
|
Print Edition
Print Edition
SHANGHAI'S key stock index rose the most in a month as concerns for further tightening measures ease after China reported that banks extended fewer loans in July.
The Shanghai Composite Index gained 1.3 percent, the largest daily rise since July 13, to 2,626.77 points.
The People's Bank of China said after the market closed last Friday that new yuan loans in July fell 25.2 billion yuan from a year earlier to 492.6 billion yuan (US$77 billion). The loans extended were less than the 550 billion yuan median estimate in a Reuters poll and lower than the 633.9 billion yuan lent in June.
Analysts said the central bank will likely hold off on increasing interest rates or the reserve requirement ratio in the short term due to uncertainties in global markets.
"Although the direction of monetary policy won't change, the possibility of further tightening is decreasing," a CITIC Securities report said yesterday.
The report said that China's stock markets have already gone past the worst period.
Banks led the gainers after the Ministry of Finance said that local government debt risks are controllable and they can use their assets to generate cash. Meanwhile, Chinese regulators have been reclassifying local government debts to ease banks' provisioning requirements to hedge against potential bad loans, the China Securities Journal reported yesterday.
China Everbright Bank Co added 1.6 percent to 3.17 yuan. The bank's 11.2 billion locked shares will be tradable on Thursday.
The Industrial and Commercial Bank of China climbed 1.2 percent to close at 4.19 yuan.
The Shanghai Composite Index gained 1.3 percent, the largest daily rise since July 13, to 2,626.77 points.
The People's Bank of China said after the market closed last Friday that new yuan loans in July fell 25.2 billion yuan from a year earlier to 492.6 billion yuan (US$77 billion). The loans extended were less than the 550 billion yuan median estimate in a Reuters poll and lower than the 633.9 billion yuan lent in June.
Analysts said the central bank will likely hold off on increasing interest rates or the reserve requirement ratio in the short term due to uncertainties in global markets.
"Although the direction of monetary policy won't change, the possibility of further tightening is decreasing," a CITIC Securities report said yesterday.
The report said that China's stock markets have already gone past the worst period.
Banks led the gainers after the Ministry of Finance said that local government debt risks are controllable and they can use their assets to generate cash. Meanwhile, Chinese regulators have been reclassifying local government debts to ease banks' provisioning requirements to hedge against potential bad loans, the China Securities Journal reported yesterday.
China Everbright Bank Co added 1.6 percent to 3.17 yuan. The bank's 11.2 billion locked shares will be tradable on Thursday.
The Industrial and Commercial Bank of China climbed 1.2 percent to close at 4.19 yuan.
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