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Stocks up 0.9% as central bank boosts liquidity
By Hu Xiaocen |
January 19, 2012, Thursday
|
Online Edition
Online Edition
THE Shanghai Composite Index edged up in the morning session on speculations that the central government will inject more liquidity to sustain economic growth.
The key index gained 0.9 percent to 2,286.89 points by noon break with a turnover of 28.1 billion yuan (US$4.5 billion).
"The A-share market will continue to fluctuate with relatively low turnover before the Chinese New Year holiday," said Guodu Securities.
The People's Bank of China increased liquidity in the stock market by repurchasing bills from banks this week. The Oriental Morning Post said the central bank will extend its reverse repurchase operation to the fourth straight day by buying 400 billion yuan worth of bills today.
To keep market liquidity at a reasonable level, the central bank usually repurchases bills from lenders every Tuesday and Thursday, but this week it bought bills also on Monday and Wednesday without disclosing the actual sums.
Banks rallied. The Industrial and Commercial Bank of China, the nation's largest bank, advanced 1.39 percent to 4.37 yuan. China Merchants Bank jumped 1.52 percent to 12.71. Bank of Communications added 1.26 percent to 4.82 yuan.
"The central bank will increase new loans in 2012 by a maximum of 5 percent from last year," Bloomberg reported. And the move to raise capital adequacy ratios will be delayed. The government is pressured to sustain economic growth amid rising inflation and real estate bubble.
The key index gained 0.9 percent to 2,286.89 points by noon break with a turnover of 28.1 billion yuan (US$4.5 billion).
"The A-share market will continue to fluctuate with relatively low turnover before the Chinese New Year holiday," said Guodu Securities.
The People's Bank of China increased liquidity in the stock market by repurchasing bills from banks this week. The Oriental Morning Post said the central bank will extend its reverse repurchase operation to the fourth straight day by buying 400 billion yuan worth of bills today.
To keep market liquidity at a reasonable level, the central bank usually repurchases bills from lenders every Tuesday and Thursday, but this week it bought bills also on Monday and Wednesday without disclosing the actual sums.
Banks rallied. The Industrial and Commercial Bank of China, the nation's largest bank, advanced 1.39 percent to 4.37 yuan. China Merchants Bank jumped 1.52 percent to 12.71. Bank of Communications added 1.26 percent to 4.82 yuan.
"The central bank will increase new loans in 2012 by a maximum of 5 percent from last year," Bloomberg reported. And the move to raise capital adequacy ratios will be delayed. The government is pressured to sustain economic growth amid rising inflation and real estate bubble.
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