Key index declines the most in a week
By Lu Nengneng |
January 14, 2012, Saturday
|
Print Edition
Print Edition
SHANGHAI'S key stock index yesterday fell the most in a week, as investors became uncertain about the liquidity situation following the release of the inflation data as well as the outflow of foreign capital.
The Shanghai Composite Index dropped 1.34 percent to 2,244.58 points and eased the weekly gain to 3.75 percent. It is the first week since November that the index has finished in positive territory.
China's Consumer Price Index, a key gauge of inflation, jumped 5.4 percent in 2011, which was above the 4 percent target set by the central government. The data dimmed the prospect of monetary policy easing in the near future.
Property developers led the retreat as they need to repay a total of 175.8 billion yuan (US$27.8 billion) to their real estate investment trusts this year, further putting pressure on their cash flow, according to Guotai Junan Securities.
Poly Real Estate lost 1.06 percent to 10.28 yuan. Gemdale Corp tumbled 2.3 percent to 5.09 yuan.
Banks also fell after the People's Bank of China yesterday said the country's foreign-exchange reserves fell for the first time in more than a decade to US$3.18 trillion on December 31 from US$3.2 trillion September 30. The outflow of foreign capital further mopped up lenders' liquidity while the central bank didn't announce another reserve requirement ratio cut as expected.
Peng Wensheng, chief economist at China International Capital Corp, said the central bank may not cut the ratio before the Spring Festival, which starts on January 23.
China CITIC Bank slid 0.94 percent to 4.23 yuan, and China Everbright Bank eased 0.34 percent to 2.94 yuan.
The Shanghai Composite Index dropped 1.34 percent to 2,244.58 points and eased the weekly gain to 3.75 percent. It is the first week since November that the index has finished in positive territory.
China's Consumer Price Index, a key gauge of inflation, jumped 5.4 percent in 2011, which was above the 4 percent target set by the central government. The data dimmed the prospect of monetary policy easing in the near future.
Property developers led the retreat as they need to repay a total of 175.8 billion yuan (US$27.8 billion) to their real estate investment trusts this year, further putting pressure on their cash flow, according to Guotai Junan Securities.
Poly Real Estate lost 1.06 percent to 10.28 yuan. Gemdale Corp tumbled 2.3 percent to 5.09 yuan.
Banks also fell after the People's Bank of China yesterday said the country's foreign-exchange reserves fell for the first time in more than a decade to US$3.18 trillion on December 31 from US$3.2 trillion September 30. The outflow of foreign capital further mopped up lenders' liquidity while the central bank didn't announce another reserve requirement ratio cut as expected.
Peng Wensheng, chief economist at China International Capital Corp, said the central bank may not cut the ratio before the Spring Festival, which starts on January 23.
China CITIC Bank slid 0.94 percent to 4.23 yuan, and China Everbright Bank eased 0.34 percent to 2.94 yuan.
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