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Shanghai shares drop on concern of delayed easing
By Ye Zhen |
August 29, 2012, Wednesday
|
Online Edition
Online Edition
SHANGHAI stocks retreated this morning after that the government continued to inject liquidity through open market operation, reigniting speculation that policymakers will put off additional easing measures.
The benchmark Shanghai Composite Index lost 0.46 percent, or 9.45 points to 2,063.71 points. Turnover stood at 21.1 billion yuan (US$3.3 billion) by the noon break.
China's central bank yesterday released a net 125 billion yuan into the nation's banking system via reverse repurchase agreements, following a total injection of 365 billion yuan last week.
The Chinese central bank has been using the reverse repurchase operations to adjust cash flows for ten straight weeks since late June, the longest streak in ten years. Analysts expected the central bank to rely more on open market operations to stabilize market liquidity as it remains cautious over its monetary policy.
Despite a liquidity crunch among lenders, a rebound in home prices is the main worry for the government to cut banks' reverse requirement ratio, said Peng Wensheng, chief economist at China International Capital Corp.
Xiamen Tungsten Co led a loss among non-ferrous metal producers, falling 3 percent to 38.40 yuan. Inner Mongolia Baotou Steel Rare-earth (Group) Hi-tech Co, China's biggest producer of rare earth materials, dived 2.4 percent to 34.40 yuan.
Gold stocks also fell. Zijin Mining Group Co, the nation's largest gold producer, shed 0.5 percent to 3.76 yuan. Zhongjin Gold Corp dropped 1.3 percent to 14.90 yuan.
Air China Limited, China's biggest international carrier skidded 0.4 percent to 4.87 yuan after reporting a 77 percent drop in first-half profit.
The benchmark Shanghai Composite Index lost 0.46 percent, or 9.45 points to 2,063.71 points. Turnover stood at 21.1 billion yuan (US$3.3 billion) by the noon break.
China's central bank yesterday released a net 125 billion yuan into the nation's banking system via reverse repurchase agreements, following a total injection of 365 billion yuan last week.
The Chinese central bank has been using the reverse repurchase operations to adjust cash flows for ten straight weeks since late June, the longest streak in ten years. Analysts expected the central bank to rely more on open market operations to stabilize market liquidity as it remains cautious over its monetary policy.
Despite a liquidity crunch among lenders, a rebound in home prices is the main worry for the government to cut banks' reverse requirement ratio, said Peng Wensheng, chief economist at China International Capital Corp.
Xiamen Tungsten Co led a loss among non-ferrous metal producers, falling 3 percent to 38.40 yuan. Inner Mongolia Baotou Steel Rare-earth (Group) Hi-tech Co, China's biggest producer of rare earth materials, dived 2.4 percent to 34.40 yuan.
Gold stocks also fell. Zijin Mining Group Co, the nation's largest gold producer, shed 0.5 percent to 3.76 yuan. Zhongjin Gold Corp dropped 1.3 percent to 14.90 yuan.
Air China Limited, China's biggest international carrier skidded 0.4 percent to 4.87 yuan after reporting a 77 percent drop in first-half profit.
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