Shanghai stocks decline over 3%
By Ding Yining |
January 14, 2010, Thursday
|
Print Edition
Print Edition
SHANGHAI'S stock market plunged by more than 3 percent yesterday - the most in seven weeks - led by declines in banks and property counters after the Chinese central bank raised the reserve ratio, sparking fears of liquidity tightening.
The benchmark Shanghai Composite Index fell 3.09 percent, or 101.31 points, to 3,172.66, its lowest close since December 25. Turnover totaled 197.3 billion yuan (US$28.9 billion).
The People's Bank of China said late Tuesday it will raise the reserve ratio, the amount of money a bank must deposit with the central bank, by 0.5 percentage points to 16 percent, starting from next Monday. Analysts and economists said this may signal that a rise in interest rate may in the pipeline and that the present easy monetary policy may be withdrawn in an effort to curb surging property prices.
"A tighter credit concern has pulled the index down and financial shares were among the most heavily impacted," Wan Bing, an analyst at GF Securities, wrote.
The Industrial and Commercial Bank of China fell 4.68 percent to 5.09 yuan. Shanghai Pudong Development Bank lost 3.89 percent to 19.99 yuan and China Construction Bank fell 3.24 percent to 6 yuan.
China Vanke Co, the biggest listed domestic real estate developer, lost 2.43 percent to 10.04 yuan and Gemdale Corp declined 4.26 percent to 12.80 yuan.
The benchmark Shanghai Composite Index fell 3.09 percent, or 101.31 points, to 3,172.66, its lowest close since December 25. Turnover totaled 197.3 billion yuan (US$28.9 billion).
The People's Bank of China said late Tuesday it will raise the reserve ratio, the amount of money a bank must deposit with the central bank, by 0.5 percentage points to 16 percent, starting from next Monday. Analysts and economists said this may signal that a rise in interest rate may in the pipeline and that the present easy monetary policy may be withdrawn in an effort to curb surging property prices.
"A tighter credit concern has pulled the index down and financial shares were among the most heavily impacted," Wan Bing, an analyst at GF Securities, wrote.
The Industrial and Commercial Bank of China fell 4.68 percent to 5.09 yuan. Shanghai Pudong Development Bank lost 3.89 percent to 19.99 yuan and China Construction Bank fell 3.24 percent to 6 yuan.
China Vanke Co, the biggest listed domestic real estate developer, lost 2.43 percent to 10.04 yuan and Gemdale Corp declined 4.26 percent to 12.80 yuan.
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