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Shanghai index stumbles as reserve ratio cut hopes fade
By Ye Zhen |
May 9, 2012, Wednesday
|
Online Edition
Online Edition
SHANGHAI stocks tumbled today amid cooling expectations for an imminent cut in the reserve requirement ratio after the central bank's unexpected bond repurchases.
The Shanghai Composite Index slipped 1.65 percent or 40.29 points to 2,408.59. Turnover stood at 99.5 billion yuan (US$15.8 billion) at the trading close.
The People's Bank of China absorbed 20 billion yuan from the money market through 28-day bond repurchase agreements yesterday after it injected cash into the market last week, signaling the central bank believes market liquidity is adequate for now.
The central bank will further reduce the reserve requirement ratio depending on inflationary movement, yuan funds outstanding for foreign exchanges, and credit growth, China International Capital Corporation Limited said in a weekly report.
The consumer price index, a major gauge of inflation, is expected to rise 3.4 percent in April from 3.6 percent in March, Industrial Bank senior economist Lu Zhengwei said on Monday. The Bank of Communications predicted a 3.3 percent rise in inflation.
The National Bureau of Statistics is scheduled to release April CPI figures on Friday.
Cargo shippers dived ahead of trade data due to be released tomorrow. COSCO Shipping Co, a unit of China COSCO, slumped 4.9 percent to 4.9 yuan. China COSCO Holdings, Asia's biggest shipper, lost 4.2 percent to 5.2 yuan.
The defense industry jumped as tension between China and the Philippines escalated. Asian Star Anchor Chain Co, CSSC Jiangnan Heavy Industry Co, and Sainty Marine Corporation all surged the day limit of 10 percent to 9.1 yuan, 20.41 yuan and 21.87 yuan respectively.
Beijing Aerospace Changfeng Co climbed 4.7 percent to 10.58 yuan. North Navigation Control Technology Co gained 4.1 percent to 10.33 yuan.
China National Offshore Oil Corp, China's largest offshore oil producer, rose 3.3 percent to 19.01 yuan after the country's first deep-water oil drilling rig started operation in the South China Sea today.
The Shanghai Composite Index slipped 1.65 percent or 40.29 points to 2,408.59. Turnover stood at 99.5 billion yuan (US$15.8 billion) at the trading close.
The People's Bank of China absorbed 20 billion yuan from the money market through 28-day bond repurchase agreements yesterday after it injected cash into the market last week, signaling the central bank believes market liquidity is adequate for now.
The central bank will further reduce the reserve requirement ratio depending on inflationary movement, yuan funds outstanding for foreign exchanges, and credit growth, China International Capital Corporation Limited said in a weekly report.
The consumer price index, a major gauge of inflation, is expected to rise 3.4 percent in April from 3.6 percent in March, Industrial Bank senior economist Lu Zhengwei said on Monday. The Bank of Communications predicted a 3.3 percent rise in inflation.
The National Bureau of Statistics is scheduled to release April CPI figures on Friday.
Cargo shippers dived ahead of trade data due to be released tomorrow. COSCO Shipping Co, a unit of China COSCO, slumped 4.9 percent to 4.9 yuan. China COSCO Holdings, Asia's biggest shipper, lost 4.2 percent to 5.2 yuan.
The defense industry jumped as tension between China and the Philippines escalated. Asian Star Anchor Chain Co, CSSC Jiangnan Heavy Industry Co, and Sainty Marine Corporation all surged the day limit of 10 percent to 9.1 yuan, 20.41 yuan and 21.87 yuan respectively.
Beijing Aerospace Changfeng Co climbed 4.7 percent to 10.58 yuan. North Navigation Control Technology Co gained 4.1 percent to 10.33 yuan.
China National Offshore Oil Corp, China's largest offshore oil producer, rose 3.3 percent to 19.01 yuan after the country's first deep-water oil drilling rig started operation in the South China Sea today.
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