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Shanghai gauge hits 5-month high on ample liquidity
By Feng Jianmin |
April 13, 2011, Wednesday
|
Online Edition
Online Edition
SHANGHAI'S key stock index jumped to a five-month high today on speculation that inflows of capital will add cash to the market despite central government's efforts to withdraw money through open market operations.
The benchmark Shanghai Composite Index was up 0.96 percent, or 29.03 points, to close at 3050.40. Turnover fell to 148.9 billion yuan (US$11.8 billion) from yesterday's 165 billion yuan.
The central bank has withdrawn 205 billion yuan yesterday, in an effort to offset the impact of a total 911 billion yuan's central bill maturing in April, the highest of the year, market watchers said.
"There are signs of increasing inflows of foreign capital to the stock market," said Shi Lei, a senior strategist with Ping'an Securities.
He expected that the central bank may increase reserve requirements in a short term but the measure will not greatly tighten the market liquidity.
Banks and property developers rebounded from losses after the noon break despite that Chinese central government restated resolution to control home prices. Investigation teams are sent out to inspect measures taken by local governments to curb speculation. The investigation is expected to be completed next week.
Shanxi Securities recommended the finance and property sector due to low valuation and stable performance, the company said in a note to its clients.
China Vanke, the largest property developer in China, rose 0.9 percent to 8.93 yuan. Agriculture Bank of China climbed 2.1 percent to 2.90 yuan.
Metal and oil producers underperformed after oil prices fell 3.3 percent to a two-week low of US$106 a barrel yesterday in New York. Copper price was down from US$9,855 a ton to US$9,630, the largest decline in five months.
Data showed China imported 15.6 percent less copper in the first quarter from a year earlier, and a Goldman Sachs report indicated that commodity prices have already peaked and invited selling.
Jiangxi Copper Co fell 2.3 percent to 39.32 yuan. PetroChina, the largest oil producer in the country, was down 1.3 percent to 11.89 yuan.
The benchmark Shanghai Composite Index was up 0.96 percent, or 29.03 points, to close at 3050.40. Turnover fell to 148.9 billion yuan (US$11.8 billion) from yesterday's 165 billion yuan.
The central bank has withdrawn 205 billion yuan yesterday, in an effort to offset the impact of a total 911 billion yuan's central bill maturing in April, the highest of the year, market watchers said.
"There are signs of increasing inflows of foreign capital to the stock market," said Shi Lei, a senior strategist with Ping'an Securities.
He expected that the central bank may increase reserve requirements in a short term but the measure will not greatly tighten the market liquidity.
Banks and property developers rebounded from losses after the noon break despite that Chinese central government restated resolution to control home prices. Investigation teams are sent out to inspect measures taken by local governments to curb speculation. The investigation is expected to be completed next week.
Shanxi Securities recommended the finance and property sector due to low valuation and stable performance, the company said in a note to its clients.
China Vanke, the largest property developer in China, rose 0.9 percent to 8.93 yuan. Agriculture Bank of China climbed 2.1 percent to 2.90 yuan.
Metal and oil producers underperformed after oil prices fell 3.3 percent to a two-week low of US$106 a barrel yesterday in New York. Copper price was down from US$9,855 a ton to US$9,630, the largest decline in five months.
Data showed China imported 15.6 percent less copper in the first quarter from a year earlier, and a Goldman Sachs report indicated that commodity prices have already peaked and invited selling.
Jiangxi Copper Co fell 2.3 percent to 39.32 yuan. PetroChina, the largest oil producer in the country, was down 1.3 percent to 11.89 yuan.
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