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Shanghai stock index dips on liquidity worry
By Feng Jianmin |
June 20, 2011, Monday
|
Online Edition
Online Edition
SHANGHAI'S key stock index dropped for the fourth day on tight liquidity as banks are required to hand in a total 380 billion yuan (US$58.7 billion) today to the central bank as the order of reserve request ratio increase takes effect.
The benchmark Shanghai Composite Index lost 0.82 percent to 2,619.62 points. Turnover fell to 66.1 billion yuan.
China's central bank ordered banks to put aside more money from lending last Tuesday so as to control liquidity and tame inflation. Commercial banks are now facing a record 21.5 percent reserve requirement ratio.
The seven-day repurchase rate, a measure for the cost of borrowing money, jumped 0.82 percentage point to 7.5 percent today, indicating a shortage of money. The rate has been growing more than 1.3 percent since the central bank announced the decision to increase reserve requirements last Tuesday.
Banks were mixed. Industrial and Commercial Bank of China lost 0.5 percent to 4.27 yuan. China Merchants Bank added 0.6 percent to 12.80 yuan.
Property developers rose after China's top statistics bureau said that home prices in 50 of the 70 major cities continued to rise in May from April. China Vanke rose 1.6 percent to 8.18 yuan. Gemdale Corp added 1.3 percent to 6.15 yuan.
Metal producers declined as metal prices on the London market dropped to the US$9,000 level. Jiangxi Copper Co fell 1.3 percent to 32.35 yuan. Yunnan Copper Co shed 1.7 percent to 20.08 yuan.
Information technology firms led the decliners. Fujian Newland Computer Co dropped 2.9 percent to 13.89 yuan. Fiberhome Telecommunications Technologies Co slid by the daily limit of 10 percent to 23.19 yuan.
The benchmark Shanghai Composite Index lost 0.82 percent to 2,619.62 points. Turnover fell to 66.1 billion yuan.
China's central bank ordered banks to put aside more money from lending last Tuesday so as to control liquidity and tame inflation. Commercial banks are now facing a record 21.5 percent reserve requirement ratio.
The seven-day repurchase rate, a measure for the cost of borrowing money, jumped 0.82 percentage point to 7.5 percent today, indicating a shortage of money. The rate has been growing more than 1.3 percent since the central bank announced the decision to increase reserve requirements last Tuesday.
Banks were mixed. Industrial and Commercial Bank of China lost 0.5 percent to 4.27 yuan. China Merchants Bank added 0.6 percent to 12.80 yuan.
Property developers rose after China's top statistics bureau said that home prices in 50 of the 70 major cities continued to rise in May from April. China Vanke rose 1.6 percent to 8.18 yuan. Gemdale Corp added 1.3 percent to 6.15 yuan.
Metal producers declined as metal prices on the London market dropped to the US$9,000 level. Jiangxi Copper Co fell 1.3 percent to 32.35 yuan. Yunnan Copper Co shed 1.7 percent to 20.08 yuan.
Information technology firms led the decliners. Fujian Newland Computer Co dropped 2.9 percent to 13.89 yuan. Fiberhome Telecommunications Technologies Co slid by the daily limit of 10 percent to 23.19 yuan.
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