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Shanghai index sags 1.27% on liquidity concerns
By Hu Xiaocen |
June 6, 2013, Thursday
|
Online Edition
Online Edition
SHANGHAI stocks retreated for a sixth consecutive trading day today as a liquidity crunch weighed on market sentiment.
The Shanghai Composite Index index slumped 1.27 percent to a three-week low of 2,242.11 points. The six-day slide is the longest losing streak this year for the index
The overnight Shanghai Interbank Offered Rate (Shibor) jumped 1.36 percentage points to 5.98 percent today. The overnight Shibor measures interbank funding availability. It was 2.54 percentage points higher than its 20-day average of 3.44 percent, raising speculation liquidity supply will tighten as banks are more reluctant to lend to each other at higher rates.
The People's Bank of China withdrew 10 billion yuan from the market through 28-day repurchase agreements today, according to a statement posted on the central bank's website.
"The central bank recently raised concerns of systematic risk in the financial system, which exacerbated the worries over a liquidity crunch," BOC International, the investment banking unit of Bank of China, said in a report today.
Lenders fell by 1.3 percent on average today after the central bank said on Wednesday that the banking sector should make more efforts to strengthen the quality of credit assets and defuse the risk from bad loans.
Shanghai Pudong Development Bank tumbled 2.1 percent to 9.45 yuan (US$1.53). Bank of Communications, China's fifth-biggest lender, slumped 1.1 percent to 4.62 yuan. Industrial and Commercial Bank of China lost 1.4 percent to 4.15 yuan.
The Shanghai Composite Index index slumped 1.27 percent to a three-week low of 2,242.11 points. The six-day slide is the longest losing streak this year for the index
The overnight Shanghai Interbank Offered Rate (Shibor) jumped 1.36 percentage points to 5.98 percent today. The overnight Shibor measures interbank funding availability. It was 2.54 percentage points higher than its 20-day average of 3.44 percent, raising speculation liquidity supply will tighten as banks are more reluctant to lend to each other at higher rates.
The People's Bank of China withdrew 10 billion yuan from the market through 28-day repurchase agreements today, according to a statement posted on the central bank's website.
"The central bank recently raised concerns of systematic risk in the financial system, which exacerbated the worries over a liquidity crunch," BOC International, the investment banking unit of Bank of China, said in a report today.
Lenders fell by 1.3 percent on average today after the central bank said on Wednesday that the banking sector should make more efforts to strengthen the quality of credit assets and defuse the risk from bad loans.
Shanghai Pudong Development Bank tumbled 2.1 percent to 9.45 yuan (US$1.53). Bank of Communications, China's fifth-biggest lender, slumped 1.1 percent to 4.62 yuan. Industrial and Commercial Bank of China lost 1.4 percent to 4.15 yuan.
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