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Shanghai index drops on interest rate concerns
By Feng Jianmin |
December 9, 2010, Thursday
|
Online Edition
Online Edition
SHANGHAI'S key stock index fell in the morning as worries about higher interest rates intensified after China's central bank halted selling three-year bills as banks demand higher yields.
The benchmark Shanghai Composite Index lost 0.7 percent, or 21.2 points, to 2,827.4. Turnover was 60.5 billion yuan (US$ 9.1 billion), slightly lower than yesterday morning's 64.1 billion yuan.
The Shenzhen Composite Index, which tracks the smaller market in southern China, was down 1.12 percent to 1,290.6.
The central bank said it will sell 5 billion yuan of three-month bills tomorrow but halt bi-weekly auctions of notes due in three years, according to a statement on its website.
Analysts said that bills offered in recent weeks have been only around 4 percent of annual level, which indicated that the central bank is considering raising interest rates or requirement reserve ratio to control liquidity.
A rate hike of 0.5 percentage point would meet market expectations, according to an analyst with First Capital Securities.
Property developers extended previous declines after the China Bank Regulatory Commission ordered to investigate risks of trust funds of property developers. China Vanke, China's largest property developer, dropped 3.2 percent to 8.22 yuan. Poly Real Estate Co, China's second largest, lost 4 percent to 12.20 yuan.
Steelmakers outperformed on news that the government would invest at lease 3 trillion yuan to expand high speed railway networks in the next five years. Baoshan Iron & Steel Co added 1 percent to 6.41 yuan. Angang Steel Co rose 1.3 percent to 7.99 yuan.
Banks were mixed. Bank of China edged up 0.3 percent to 3.28 yuan. Industrial Bank of China dipped 0.2 percent to 4.24 yuan.
The benchmark Shanghai Composite Index lost 0.7 percent, or 21.2 points, to 2,827.4. Turnover was 60.5 billion yuan (US$ 9.1 billion), slightly lower than yesterday morning's 64.1 billion yuan.
The Shenzhen Composite Index, which tracks the smaller market in southern China, was down 1.12 percent to 1,290.6.
The central bank said it will sell 5 billion yuan of three-month bills tomorrow but halt bi-weekly auctions of notes due in three years, according to a statement on its website.
Analysts said that bills offered in recent weeks have been only around 4 percent of annual level, which indicated that the central bank is considering raising interest rates or requirement reserve ratio to control liquidity.
A rate hike of 0.5 percentage point would meet market expectations, according to an analyst with First Capital Securities.
Property developers extended previous declines after the China Bank Regulatory Commission ordered to investigate risks of trust funds of property developers. China Vanke, China's largest property developer, dropped 3.2 percent to 8.22 yuan. Poly Real Estate Co, China's second largest, lost 4 percent to 12.20 yuan.
Steelmakers outperformed on news that the government would invest at lease 3 trillion yuan to expand high speed railway networks in the next five years. Baoshan Iron & Steel Co added 1 percent to 6.41 yuan. Angang Steel Co rose 1.3 percent to 7.99 yuan.
Banks were mixed. Bank of China edged up 0.3 percent to 3.28 yuan. Industrial Bank of China dipped 0.2 percent to 4.24 yuan.
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