PBOC move to curb funds hits key index
By Pan Xiaoyi |
February 23, 2010, Tuesday
|
Print Edition
Print Edition
SHANGHAI'S key stock index ended slightly lower yesterday, the first trading day after the Lunar New Year break, as investor sentiment was dampened by the central bank's stance to further curb liquidity.
The Shanghai Composite Index dipped 0.49 percent, or 14.73 points, to close at 3,003.4. Turnover totaled 78.7 billion yuan (US$11.57 billion).
The People's Bank of China announced before the holiday that it will raise the bank reserve ratio to 16.5 percent on Thursday, the second increase this year.
Market watchers predicted the PBOC may raise the reserve ratio again as soon as March to soak up market liquidity and curb inflation.
"The reserve ratio may be raised by another 0.5 percentage points next month to rein in the surge in bank loans," Shenyin & Wanguo Securities said in a research note.
Lenders extended 1.39 trillion yuan of new loans in January, nearly one-fifth of this year's 7.5 trillion yuan target.
The market also speculated that China would raise interest rates in April.
Lenders led the decliners. The Bank of China lost 0.5 percent to 4.11 yuan, China Construction Bank Corp was off 0.9 percent at 5.64 yuan and the Industrial and Commercial Bank of China shed 0.6 percent to 4.88 yuan.
Brokerages were mixed as the China Financial Futures Exchange started to accept applications from investors to open accounts to trade stock index futures yesterday. CITIC Securities Co added 0.7 percent to 27.52 yuan.
The Shanghai Composite Index dipped 0.49 percent, or 14.73 points, to close at 3,003.4. Turnover totaled 78.7 billion yuan (US$11.57 billion).
The People's Bank of China announced before the holiday that it will raise the bank reserve ratio to 16.5 percent on Thursday, the second increase this year.
Market watchers predicted the PBOC may raise the reserve ratio again as soon as March to soak up market liquidity and curb inflation.
"The reserve ratio may be raised by another 0.5 percentage points next month to rein in the surge in bank loans," Shenyin & Wanguo Securities said in a research note.
Lenders extended 1.39 trillion yuan of new loans in January, nearly one-fifth of this year's 7.5 trillion yuan target.
The market also speculated that China would raise interest rates in April.
Lenders led the decliners. The Bank of China lost 0.5 percent to 4.11 yuan, China Construction Bank Corp was off 0.9 percent at 5.64 yuan and the Industrial and Commercial Bank of China shed 0.6 percent to 4.88 yuan.
Brokerages were mixed as the China Financial Futures Exchange started to accept applications from investors to open accounts to trade stock index futures yesterday. CITIC Securities Co added 0.7 percent to 27.52 yuan.
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