Key index slips on liquidity concerns
By Cai Chenyi and Feng Jianmin |
March 25, 2011, Friday
|
Print Edition
Print Edition
SHANGHAI'S key stock index ended a tad lower yesterday as worries about tighter liquidity outweighed a positive outlook for China's industrial expansion.
The Shanghai Composite Index edged down 0.1 percent to end at 2,946.71.
From today, commercial banks in China will have to freeze a total of 360 billion yuan with the People's Bank of China as the central bank last week said it would raise the reserve requirement ratio by 0.5 percentage point. The PBOC has already withdrawn more than 100 billion yuan from the financial institutions so far this week.
Zhang Xiaohui, head of the PBOC's monetary policy unit, said yesterday that market liquidity should be strengthened as a persistent trade surplus would restrain interest rates from rising.
"China will maintain its tightening policies amid growing inflationary pressure," said Cao Xuefeng, an analyst at Huaxi Securities. But he forecast the central bank may "postpone an interest rate hike till after early April."
China's manufacturing growth is accelerating in March, HSBC Flash China Manufacturing Purchasing Managers' Index showed.
Banks were mixed. China CITIC Bank Corp fell 1 percent to 5.39 yuan. The Industrial and Commercial Bank of China rose 0.2 percent to 4.41 yuan.
PetroChina finished 1.2 per cent higher.
The Shanghai Composite Index edged down 0.1 percent to end at 2,946.71.
From today, commercial banks in China will have to freeze a total of 360 billion yuan with the People's Bank of China as the central bank last week said it would raise the reserve requirement ratio by 0.5 percentage point. The PBOC has already withdrawn more than 100 billion yuan from the financial institutions so far this week.
Zhang Xiaohui, head of the PBOC's monetary policy unit, said yesterday that market liquidity should be strengthened as a persistent trade surplus would restrain interest rates from rising.
"China will maintain its tightening policies amid growing inflationary pressure," said Cao Xuefeng, an analyst at Huaxi Securities. But he forecast the central bank may "postpone an interest rate hike till after early April."
China's manufacturing growth is accelerating in March, HSBC Flash China Manufacturing Purchasing Managers' Index showed.
Banks were mixed. China CITIC Bank Corp fell 1 percent to 5.39 yuan. The Industrial and Commercial Bank of China rose 0.2 percent to 4.41 yuan.
PetroChina finished 1.2 per cent higher.
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