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Stock close up on stimulus speculation
By Ye Zhen |
July 17, 2012, Tuesday
|
Online Edition
Online Edition
SHANGHAI stocks rebounded today after falling to a three-year low yesterday on speculation that the government may take measures to boost economic growth.
The key Shanghai Composite Index added 0.62 percent to settle at 2161.19 points. Turnover was 52.1 billion yuan (US$8.3 billion) by the trading close.
The International Monetary Fund yesterday cut its forecast for China's economic growth in 2012 to 8 percent from 8.2 percent, and shaved its 2013 forest for China to 8.5 percent from 8.8 percent.
The central bank has executed two cuts in benchmark interest rates and two cuts in banks' reserve requirement ratio this year to shore up the nation's economy that is suffering from the deepest slowdown since the global financial crisis in 2008.
Analysts expect the central bank to cut banks' reserve requirement ratio again this week as the economic slowdown continues. Ding Ping, a senior bond trader at Shanghai Rural Commercial Bank, said China's reserve requirement ratio is still at a relatively high level and the government may cut the ratio four times within the year. This week could be good timing for a cut, he added.
Financial institutions led the market gains. Citic Securities, the biggest listed brokerage, rose 2.6 percent to 12.82 yuan. Haitong Securities Co jumped 2.2 percent to 9.83 yuan.
Industrial and Commercial Bank of China Ltd, the nation's largest lender, increased 0.5 percent to 3.81 yuan. China Construction Bank Corporation rose 0.5 percent to 4.02 yuan.
Cement producers also rose on speculation that the government may accelerate investments in construction. Anhui Conch Cement Co, the biggest Chinese cement producer, increased 2.9 percent to 15.15 yuan. Zhejiang Jianfeng Group Co gained 2 percent to 11.23 yuan.
The key Shanghai Composite Index added 0.62 percent to settle at 2161.19 points. Turnover was 52.1 billion yuan (US$8.3 billion) by the trading close.
The International Monetary Fund yesterday cut its forecast for China's economic growth in 2012 to 8 percent from 8.2 percent, and shaved its 2013 forest for China to 8.5 percent from 8.8 percent.
The central bank has executed two cuts in benchmark interest rates and two cuts in banks' reserve requirement ratio this year to shore up the nation's economy that is suffering from the deepest slowdown since the global financial crisis in 2008.
Analysts expect the central bank to cut banks' reserve requirement ratio again this week as the economic slowdown continues. Ding Ping, a senior bond trader at Shanghai Rural Commercial Bank, said China's reserve requirement ratio is still at a relatively high level and the government may cut the ratio four times within the year. This week could be good timing for a cut, he added.
Financial institutions led the market gains. Citic Securities, the biggest listed brokerage, rose 2.6 percent to 12.82 yuan. Haitong Securities Co jumped 2.2 percent to 9.83 yuan.
Industrial and Commercial Bank of China Ltd, the nation's largest lender, increased 0.5 percent to 3.81 yuan. China Construction Bank Corporation rose 0.5 percent to 4.02 yuan.
Cement producers also rose on speculation that the government may accelerate investments in construction. Anhui Conch Cement Co, the biggest Chinese cement producer, increased 2.9 percent to 15.15 yuan. Zhejiang Jianfeng Group Co gained 2 percent to 11.23 yuan.
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