PBOC’s liquidity boost spurs shares higher
Print Edition
CHINA stocks yesterday rose for the fourth straight day as investors were relieved by central bank efforts to boost liquidity in the financial system.
The Shanghai Composite Index gained 0.74 percent to 3,112.96 points.
Small caps outperformed the broader market, with the index tracking small and medium-sized companies in Shenzhen advancing 2 percent, posting its best day in nine months.
The gauge tracking ChiNext, China’s Nasdaq-style board of growth enterprises, ended 2.04 percent higher, the largest daily rise recorded this year.
The People’s Bank of China injected a net 170 billion yuan (US$24.7 billion) into money market through open market operations yesterday — the most in nearly four months.
In a rare explanation, the PBOC said the injection is meant to “offset impact from factors including tax payment and maturing open market operations,” indicating Beijing’s intention to maintain stability in the markets amid widespread concerns over policy tightening.
Analysts said it was vital for the Shanghai index to return to the 3,100-point level as it could boost investor confidence.
Shares related to Xiongan New Area, a new economic zone to be built near Beijing, drove the rebound yesterday, with 15 stocks, including Beijing Capital Co and SPIC Shijiazhuang Dongfang Energy Corp, jumping by the daily limit of 10 percent.
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