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Shanghai index dips despite central bank move to inject liquidity
By Ye Zhen |
June 26, 2012, Tuesday
|
Online Edition
Online Edition
SHANGHAI stocks ended slightly lower today, almost wiping out losses from the morning session after the nation's central bank injected liquidity through an open market operation.
The Shanghai Composite Index lost 0.09 percent, or 2.05 points to end at 2,222.07 points. Turnover was 47.3 billion yuan (US$7.5 billion) at the trading close.
The People's Bank of China, China's central bank, released 95 billion yuan today through a 14-day reverse repurchase agreement with an interest rate of 4.2 percent.
Analysts said the move improves overall liquidity in the near term but pressure remains as funds outstanding for foreign exchange shrank. This refers to the amount of a country's currency in circulation as a result of the central bank's and financial institutions' purchases of foreign exchange assets.
"Liquidity in the interbank market is expected to remain tight in July due to seasonal factors, new yuan loans and the decline of funds outstanding for foreign exchange," China International Capital Corp said today.
"The central bank may cut the reserve requirement ratio in July and lower the benchmark interest rate in August," the company said.
Most property developers gained today as home sales in June picked up in many major cities. China Vanke, the nation's biggest developer, climbed 2.3 percent to close at 8.95 yuan. Poly Real Estate, the second largest developer, rose 2.7 percent to 11.24 yuan. Gemdale Corporation added 3 percent to 6.58 yuan.
Brokerages also rose. Citic Securities, the biggest listed brokerage, added 0.3 percent to 12.35 yuan. Sinolink Securities Co climbed 2.5 percent to 14.19 yuan. Haitong Securities Co rose 1.5 percent to 9.40 yuan.
Water conservancy related stocks were among the worst performers today. Heilongjiang Interchina Watertreatment Co dropped 6 percent to 8.91 yuan. Jiangsu Jiangnan Water Co slumped 3.2 percent to 13.85 yuan. Qianjiang Water Resources Development Co fell 6.9 percent to 9.90 yuan.
The Shanghai Composite Index lost 0.09 percent, or 2.05 points to end at 2,222.07 points. Turnover was 47.3 billion yuan (US$7.5 billion) at the trading close.
The People's Bank of China, China's central bank, released 95 billion yuan today through a 14-day reverse repurchase agreement with an interest rate of 4.2 percent.
Analysts said the move improves overall liquidity in the near term but pressure remains as funds outstanding for foreign exchange shrank. This refers to the amount of a country's currency in circulation as a result of the central bank's and financial institutions' purchases of foreign exchange assets.
"Liquidity in the interbank market is expected to remain tight in July due to seasonal factors, new yuan loans and the decline of funds outstanding for foreign exchange," China International Capital Corp said today.
"The central bank may cut the reserve requirement ratio in July and lower the benchmark interest rate in August," the company said.
Most property developers gained today as home sales in June picked up in many major cities. China Vanke, the nation's biggest developer, climbed 2.3 percent to close at 8.95 yuan. Poly Real Estate, the second largest developer, rose 2.7 percent to 11.24 yuan. Gemdale Corporation added 3 percent to 6.58 yuan.
Brokerages also rose. Citic Securities, the biggest listed brokerage, added 0.3 percent to 12.35 yuan. Sinolink Securities Co climbed 2.5 percent to 14.19 yuan. Haitong Securities Co rose 1.5 percent to 9.40 yuan.
Water conservancy related stocks were among the worst performers today. Heilongjiang Interchina Watertreatment Co dropped 6 percent to 8.91 yuan. Jiangsu Jiangnan Water Co slumped 3.2 percent to 13.85 yuan. Qianjiang Water Resources Development Co fell 6.9 percent to 9.90 yuan.
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