Key index surges almost 3%
By Feng Jianmin and Pan Xiaoyi |
June 22, 2010, Tuesday
|
Print Edition
Print Edition
SHANGHAI stocks surged nearly 3 percent to post the biggest daily gain in nearly a month yesterday after the Chinese central bank pledged to increase yuan flexibility gradually.
The Shanghai Composite Index jumped 2.9 percent, or 72.99 points, to close at 2,586.21, the biggest gain since May 24. Turnover stood at 81.7 billion yuan (US$12 billion).
The People's Bank of China said it will keep the yuan basically stable and manage the exchange rate based on the floating band announced in the interbank foreign exchange market.
"The expectations over a yuan appreciation will trigger inflows of international capital and ease pressure of reducing market liquidity," Hongyuan Securities Co said in a research note.
Guosen Securities Co wrote that the reform of the exchange rate may help to curb inflation and pressure to increase interest rates, "and it may further encourage economic transformation from exports to high-value added service industries."
Banks and property developers led gainers on speculation the yuan appreciation will ease pressure for more tightening measures.
Shanghai-based Shimao Co jumped 6.7 percent to 12.24 yuan. Poly Real Estate Group Co, the country's largest state-owned property developer, surged 5.2 percent to 11.80 yuan and Shanghai Lujiazui Finance and Trade Zone Development Co increased 3.8 percent to 18.97 yuan.
The Bank of China rose 2.9 percent to 3.59 yuan, the Industrial and Commercial Bank of China jumped 2.6 percent to 4.28 yuan, and Shanghai Pudong Development Bank Co climbed 4.2 percent to 14.48 yuan.
China Eastern Airlines Corp jumped 5.6 percent to 7.93 yuan while Air China rose 6.4 percent to 11.73 yuan. Hainan Airlines Co soared 9.9 percent to 6.09 yuan.
The Shanghai Composite Index jumped 2.9 percent, or 72.99 points, to close at 2,586.21, the biggest gain since May 24. Turnover stood at 81.7 billion yuan (US$12 billion).
The People's Bank of China said it will keep the yuan basically stable and manage the exchange rate based on the floating band announced in the interbank foreign exchange market.
"The expectations over a yuan appreciation will trigger inflows of international capital and ease pressure of reducing market liquidity," Hongyuan Securities Co said in a research note.
Guosen Securities Co wrote that the reform of the exchange rate may help to curb inflation and pressure to increase interest rates, "and it may further encourage economic transformation from exports to high-value added service industries."
Banks and property developers led gainers on speculation the yuan appreciation will ease pressure for more tightening measures.
Shanghai-based Shimao Co jumped 6.7 percent to 12.24 yuan. Poly Real Estate Group Co, the country's largest state-owned property developer, surged 5.2 percent to 11.80 yuan and Shanghai Lujiazui Finance and Trade Zone Development Co increased 3.8 percent to 18.97 yuan.
The Bank of China rose 2.9 percent to 3.59 yuan, the Industrial and Commercial Bank of China jumped 2.6 percent to 4.28 yuan, and Shanghai Pudong Development Bank Co climbed 4.2 percent to 14.48 yuan.
China Eastern Airlines Corp jumped 5.6 percent to 7.93 yuan while Air China rose 6.4 percent to 11.73 yuan. Hainan Airlines Co soared 9.9 percent to 6.09 yuan.
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