Liquidity worries hang over investors
Print Edition
Shanghai stocks yesterday fell for a third straight day amid uncertainty over liquidity and housing policy.
The Shanghai Composite Index shed 0.86 percent to 2,164.32 points.
Investors had speculated a tighter stance over monetary policy due to rising inflationary pressure may be planned.
The seven-day repurchase rate, a gauge of available funds in the money market, rose 68.80 basis points to 4.68 percent in Shanghai yesterday as the People’s Bank of China continued not to inject money via the auction of reverse repo agreements for a third session.
Zhang Zhiwei, chief China economist at Nomura Holdings Inc, said in a note yesterday that the government refrained from adjusting its liquidity management to offset seasonal factors pushing the repo rate to rise, a sign of tighter monetary policy.
Property developers fell after the Beijing government unveiled new measures to rein in housing prices.
In a statement on its website on Wednesday, the Beijing Commission of Housing and Urban-Rural Development said it will build affordable apartments quickly and release land to build 20,000 homes by the end of the year.
UBS Investment Research said in a report that more cities may also unveil new policies as home prices in 18 of 100 cities tracked by UBS have risen by over 10 percent since the beginning of the year.
Poly Real Estate Group Co, China’s second-largest homebuilder, lost 1.8 percent to 9.42 yuan (US$1.55). Gemdale Corp fell 1.2 percent to 5.77 yuan.
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