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Shanghai market jumps after reserve ratio hike
By Feng Jianmin |
May 13, 2011, Friday
|
Online Edition
Online Edition
SHANGHAI'S key stock index rose most in a month today after the central bank yesterday evening announced a rise in reserve requirements for the fifth time this year, easing concerns for more tightening measures in a short term.
The benchmark Shanghai Composite Index went up 0.95 percent, or 26.95 points, to close at 2,871.03. Turnover fell to was 105.3 billion yuan (US$16.2 billion) from yesterday's 115 billion yuan.
The index was almost flat this week, ending 0.2 percent higher.
Banks have been told to make less money available for lending as China continues its tightening. The reserve requirements will rise by 0.5 percentage points from next Wednesday, the People's Bank of China said.
"The timing was a surprise but the measure is in line with market expectations," Nanjing Securities wrote in a note. "It aimed at offsetting large inflow of hot money in April. We expected the government will not take tightening measures again in a short term as the economic development slows down."
Banks rose. Industrial and Commercial Bank of China rose 2 percent to 4.58 yuan. China Merchants Bank was up 1.1 percent to 14.08 yuan.
Coal miners rallied after coal prices rose for eight consecutive days. China Shenhua Energy Co rose 2.3 percent to 28.09 yuan. Datong Coal Industry Co went up 1.7 percent to 18.05 yuan.
Cement producers dropped. Henan Tongli Cement Co shed 3.3 percent to 15.18 yuan.
The benchmark Shanghai Composite Index went up 0.95 percent, or 26.95 points, to close at 2,871.03. Turnover fell to was 105.3 billion yuan (US$16.2 billion) from yesterday's 115 billion yuan.
The index was almost flat this week, ending 0.2 percent higher.
Banks have been told to make less money available for lending as China continues its tightening. The reserve requirements will rise by 0.5 percentage points from next Wednesday, the People's Bank of China said.
"The timing was a surprise but the measure is in line with market expectations," Nanjing Securities wrote in a note. "It aimed at offsetting large inflow of hot money in April. We expected the government will not take tightening measures again in a short term as the economic development slows down."
Banks rose. Industrial and Commercial Bank of China rose 2 percent to 4.58 yuan. China Merchants Bank was up 1.1 percent to 14.08 yuan.
Coal miners rallied after coal prices rose for eight consecutive days. China Shenhua Energy Co rose 2.3 percent to 28.09 yuan. Datong Coal Industry Co went up 1.7 percent to 18.05 yuan.
Cement producers dropped. Henan Tongli Cement Co shed 3.3 percent to 15.18 yuan.
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