Stocks slip on bank reserves mandate
By Feng Jianmin |
June 16, 2011, Thursday
|
Print Edition
Print Edition
SHANGHAI'S key stock index yesterday fell the most in a week after the central bank asked lenders to put aside more money from lending.
The benchmark Shanghai Composite Index lost 0.9 percent to 2,705.43 points, the biggest drop since June 9.
The sixth increase in the reserve requirement ratio this year, announced after the market closed on Tuesday, will take effect on Monday. China's biggest lenders will have to set aside a record 21.5 percent of their funds at the central bank, making less money available for lending.
The central bank said in a report on Tuesday that it would continue working to stabilize prices and create a suitable monetary environment for taming inflation and controlling the property market.
"The influence of tightening policies on liquidity is weaker after so many moves, but market sentiment is low after seeing high inflation after the measures," said Li Haiyan, an analyst at Yingda Securities.
Analysts said investors recently have been shifting money quickly among sectors, a sign they are worried about the market. They said the market will remain weak this week around 2,740 points.
Banks led the declines. The Agricultural Bank of China lost 0.7 percent to 2.71 yuan. Shanghai Pudong Development Bank dropped 2 percent to 9.72 yuan.
Developers dropped after Standard & Poor's downgraded its outlook for the sector from stable to negative.
The benchmark Shanghai Composite Index lost 0.9 percent to 2,705.43 points, the biggest drop since June 9.
The sixth increase in the reserve requirement ratio this year, announced after the market closed on Tuesday, will take effect on Monday. China's biggest lenders will have to set aside a record 21.5 percent of their funds at the central bank, making less money available for lending.
The central bank said in a report on Tuesday that it would continue working to stabilize prices and create a suitable monetary environment for taming inflation and controlling the property market.
"The influence of tightening policies on liquidity is weaker after so many moves, but market sentiment is low after seeing high inflation after the measures," said Li Haiyan, an analyst at Yingda Securities.
Analysts said investors recently have been shifting money quickly among sectors, a sign they are worried about the market. They said the market will remain weak this week around 2,740 points.
Banks led the declines. The Agricultural Bank of China lost 0.7 percent to 2.71 yuan. Shanghai Pudong Development Bank dropped 2 percent to 9.72 yuan.
Developers dropped after Standard & Poor's downgraded its outlook for the sector from stable to negative.
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