Stocks reach seven-week high
By Hu Xiaocen |
May 5, 2012, Saturday
|
Print Edition
Print Edition
SHANGHAI stocks advanced to a seven-week high yesterday after the Chinese central bank executed seven-day reverse repurchase agreements to boost market liquidity.
The Shanghai Composite Index added 0.49 percent to 2,452.01 points yesterday. The index gained 2.3 percent this week, the biggest weekly gain since February.
The People's Bank of China injected 65 billion yuan (US$10.3 billion) into the interbank market on Thursday through the reverse repurchase deals with selected banks. Under such arrangements, the central bank lends the capital to banks with their bills as collateral.
"Improving liquidity is the fundamental force that pulls up stock valuations," Central China Securities said in a report yesterday. "Fiscal deposits dropped and a number of government investment projects started in April, indicating a stabilizing economy. Therefore the A-share market rally will likely continue."
Lenders advanced on improved market outlook. The Industrial and Commercial Bank of China, the nation's biggest lender, gained 0.5 percent to 4.38 yuan. China Construction Bank added 0.6 percent to 4.76 yuan.
The Shanghai Composite Index added 0.49 percent to 2,452.01 points yesterday. The index gained 2.3 percent this week, the biggest weekly gain since February.
The People's Bank of China injected 65 billion yuan (US$10.3 billion) into the interbank market on Thursday through the reverse repurchase deals with selected banks. Under such arrangements, the central bank lends the capital to banks with their bills as collateral.
"Improving liquidity is the fundamental force that pulls up stock valuations," Central China Securities said in a report yesterday. "Fiscal deposits dropped and a number of government investment projects started in April, indicating a stabilizing economy. Therefore the A-share market rally will likely continue."
Lenders advanced on improved market outlook. The Industrial and Commercial Bank of China, the nation's biggest lender, gained 0.5 percent to 4.38 yuan. China Construction Bank added 0.6 percent to 4.76 yuan.
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