Key index closes nearly 2% higher, with biggest gains in two weeks
By Lu Nengneng |
February 3, 2012, Friday
|
Print Edition
Print Edition
SHANGHAI'S stock market yesterday closed with the biggest gains in two weeks after better-than-expected manufacturing data and new measures to help private small businesses boosted investor confidence in China's ability to engineer a soft economic landing.
The Shanghai Composite Index regained Wednesday's lost ground and ended 1.96 percent higher at 2,312.56, its biggest gain since January 17.
Investors took comfort from the official Purchasing Managers' Index for January, which rose to 50.5 from December's 50.3, as it indicated the green shoots of China's economic recovery, and they were also cheered by a newly set-up 15 billion yuan (US$2.4 billion) fund for cash-strapped micro and small enterprises as growth moderates in the world's second-largest economy.
China will also extend preferential tax policies for small companies until 2015 and will ask banks to increase tolerance of bad loans to these businesses, according to a statement, citing a State Council meeting presided by Premier Wen Jiabao. The small firms have been hurt by a credit squeeze after the government raised lenders' reserve-ratio requirements over the past two years.
Banks jumped after the state-run Central Huijin Investment Co reportedly agreed with major lenders, in which it holds stakes, to cut the cash dividend ratio by 5 percentage points to retain earnings and improve capital adequacy.
The Industrial and Commercial Bank of China, the nation's biggest listed lender, climbed 2.3 percent to 4.38 yuan. China Construction Bank added 2.3 percent to 4.85 yuan, and the Bank of China rose 2 percent to 3.04 yuan.
Agriculture-related stocks also rose after a government policy document issued on Wednesday urged more technological innovation to sustain growth in the farming sector. Xinjiang Talimu Agriculture Development Co soared by the 10 percent daily limit to 8.22 yuan.
New China Life Insurance, which is set to raise 15 billion yuan via a bond issue, rose 3.7 percent to close at 31.09 yuan.
The Shanghai Composite Index regained Wednesday's lost ground and ended 1.96 percent higher at 2,312.56, its biggest gain since January 17.
Investors took comfort from the official Purchasing Managers' Index for January, which rose to 50.5 from December's 50.3, as it indicated the green shoots of China's economic recovery, and they were also cheered by a newly set-up 15 billion yuan (US$2.4 billion) fund for cash-strapped micro and small enterprises as growth moderates in the world's second-largest economy.
China will also extend preferential tax policies for small companies until 2015 and will ask banks to increase tolerance of bad loans to these businesses, according to a statement, citing a State Council meeting presided by Premier Wen Jiabao. The small firms have been hurt by a credit squeeze after the government raised lenders' reserve-ratio requirements over the past two years.
Banks jumped after the state-run Central Huijin Investment Co reportedly agreed with major lenders, in which it holds stakes, to cut the cash dividend ratio by 5 percentage points to retain earnings and improve capital adequacy.
The Industrial and Commercial Bank of China, the nation's biggest listed lender, climbed 2.3 percent to 4.38 yuan. China Construction Bank added 2.3 percent to 4.85 yuan, and the Bank of China rose 2 percent to 3.04 yuan.
Agriculture-related stocks also rose after a government policy document issued on Wednesday urged more technological innovation to sustain growth in the farming sector. Xinjiang Talimu Agriculture Development Co soared by the 10 percent daily limit to 8.22 yuan.
New China Life Insurance, which is set to raise 15 billion yuan via a bond issue, rose 3.7 percent to close at 31.09 yuan.
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