Stocks increase in thin trading
By Feng Jianmin |
June 23, 2011, Thursday
|
Print Edition
Print Edition
SHANGHAI'S key stock index yesterday rose for a second day led by electricity grid builders, but trading was thin as investors remained anxious about inflation and a potential interest rate hike.
The benchmark Shanghai Composite Index edged up 0.1 percent to 2,649.32 points. Turnover fell to 65 billion yuan (US$10 billion) from Tuesday's 74 billion yuan.
"Investors are divided on expectations for economic growth," said Shen Zhengyang, an analyst with Northeast Securities. "The market will continue to fluctuate due to policy uncertainties."
An "unidentified leader" of the price department of the National Development and Reform Commission said inflation in the next several months will be faster than May but is still "generally controllable," according to a report on the commission's website yesterday.
"Inflation data will peak in June due to the legacy impact of fast inflation last year," the official said. "But the government's measures to control prices are taking effect."
Meanwhile, concerns over another interest rate hike picked up after the central bank raised the interest rate for its one-year bill by 0.1 percentage point to 3.4 percent, 0.15 percentage point higher than the benchmark interest rate for one-year deposits.
"The increased interest rate for the one-year bill always predicts an interest rate hike," said Wang Fang, an analyst with China Galaxy Securities. "But the extent of tightening is not likely to exceed market expectations due to the continuing appreciation of the yuan."
Market liquidity continues to be tight.
The benchmark Shanghai Composite Index edged up 0.1 percent to 2,649.32 points. Turnover fell to 65 billion yuan (US$10 billion) from Tuesday's 74 billion yuan.
"Investors are divided on expectations for economic growth," said Shen Zhengyang, an analyst with Northeast Securities. "The market will continue to fluctuate due to policy uncertainties."
An "unidentified leader" of the price department of the National Development and Reform Commission said inflation in the next several months will be faster than May but is still "generally controllable," according to a report on the commission's website yesterday.
"Inflation data will peak in June due to the legacy impact of fast inflation last year," the official said. "But the government's measures to control prices are taking effect."
Meanwhile, concerns over another interest rate hike picked up after the central bank raised the interest rate for its one-year bill by 0.1 percentage point to 3.4 percent, 0.15 percentage point higher than the benchmark interest rate for one-year deposits.
"The increased interest rate for the one-year bill always predicts an interest rate hike," said Wang Fang, an analyst with China Galaxy Securities. "But the extent of tightening is not likely to exceed market expectations due to the continuing appreciation of the yuan."
Market liquidity continues to be tight.
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