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Stocks decline as investors fear reserve ratio cut no longer imminent
By Ye Zhen |
May 9, 2012, Wednesday
|
Online Edition
Online Edition
SHANGHAI stocks dropped in today's morning session on speculation the government will hold off on loosening monetary policy after the central bank drained liquidity from the money market via its regular open-market operation yesterday.
The Shanghai Composite Index slumped 1.33 percent, or 32.6 points to 2,416.28, Turnover stood at 56.6 billion yuan (US$8.98 billion) at the noon break.
The People's Bank of China drained 20 billion yuan from the money market through 28-day bond repurchase agreements yesterday. This decision came after the central bank unexpectedly restarted bill repurchases to inject funds via seven-day reverse repurchase agreements last week.
The operation led to anticipation that further cuts in the reserve requirement ratio will not happen this month as it indicates the central bank believes liquidity is sufficient for now.
Gold stocks led the market down after gold futures fell in New York. Eastern Gold Jade Co dropped 3.3 percent to 15.18 yuan. Zhongjin Gold Corp fell 3.3 percent to 22.81 yuan. Gansu Ronghua Industry Group Co lost 3.2 percent to 9.6 yuan.
Ship manufacturers rose as a dispute over Huangyan Island between China and the Philippines intensified after Beijing declared it has made "every preparation" to respond to Manila's "provocations."
Asian Star Anchor Chain Co and Sainty Marine Corporation both surged the daily limit of 10 percent to 9.10 yuan and 21.87 yuan respectively. CSSC Jiangnan Heavy Industry Co climbed 5.6 percent to 19.59 yuan. Guangzhou Shipyard International gained 3.6 percent to 17.02 yuan.
The Shanghai Composite Index slumped 1.33 percent, or 32.6 points to 2,416.28, Turnover stood at 56.6 billion yuan (US$8.98 billion) at the noon break.
The People's Bank of China drained 20 billion yuan from the money market through 28-day bond repurchase agreements yesterday. This decision came after the central bank unexpectedly restarted bill repurchases to inject funds via seven-day reverse repurchase agreements last week.
The operation led to anticipation that further cuts in the reserve requirement ratio will not happen this month as it indicates the central bank believes liquidity is sufficient for now.
Gold stocks led the market down after gold futures fell in New York. Eastern Gold Jade Co dropped 3.3 percent to 15.18 yuan. Zhongjin Gold Corp fell 3.3 percent to 22.81 yuan. Gansu Ronghua Industry Group Co lost 3.2 percent to 9.6 yuan.
Ship manufacturers rose as a dispute over Huangyan Island between China and the Philippines intensified after Beijing declared it has made "every preparation" to respond to Manila's "provocations."
Asian Star Anchor Chain Co and Sainty Marine Corporation both surged the daily limit of 10 percent to 9.10 yuan and 21.87 yuan respectively. CSSC Jiangnan Heavy Industry Co climbed 5.6 percent to 19.59 yuan. Guangzhou Shipyard International gained 3.6 percent to 17.02 yuan.
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