Wen gives stocks a big boost
By Feng Jianmin |
June 25, 2011, Saturday
|
Print Edition
Print Edition
SHANGHAI'S key stock index rose the most since February 14 after Premier Wen Jiabao said the government is confident inflation will be controlled this year.
The benchmark Shanghai Composite Index rose 2.16 percent to 2,746.21 points. Turnover nearly doubled to 144.3 billion yuan (US$22.3 billion) from Thursday's 83.4 billion yuan.
The index rose 3.9 percent this week, the largest weekly gain in more than six months, despite tight liquidity after the banks handed in 380 billion yuan in reserves to the central bank after a 0.5 percentage point increase in the ratio took effect on Monday.
Inflation concerns eased after Wen wrote in the Financial Times newspaper that "China has made capping price rises the priority of macro-economic regulations and introduced a host of targeted policies. These have worked."
He added the overall price level now is within a controllable range and is expected to drop steadily.
China's top leaders will gather early next month to determine the direction of economic policy in the second half of this year.
"We expect that economic data for August will show a positive economic situation," Haitong Securities wrote in a note. "Inflation will be tamed as the legacy impact of fast inflation last year is absorbed, while economic growth will be sustained by construction of affordable homes and strong exports."
Meanwhile, oil prices hovered around US$91 per barrel during after hours trading in the US.
The International Energy Agency on Thursday announced it will release 60 million barrels of reserves as an attempt to counter high energy prices and global inflation. The price fell 5.5 percent to US$90.40 a barrel on Thursday.
But analysts said the impact on oil prices may be only temporary.
Airlines led yesterday's gains on speculation that a lower oil price will boost profits. Air China jumped 6.4 percent to 9.88 yuan. China Eastern climbed 4.4 percent to 5.20 yuan.
The benchmark Shanghai Composite Index rose 2.16 percent to 2,746.21 points. Turnover nearly doubled to 144.3 billion yuan (US$22.3 billion) from Thursday's 83.4 billion yuan.
The index rose 3.9 percent this week, the largest weekly gain in more than six months, despite tight liquidity after the banks handed in 380 billion yuan in reserves to the central bank after a 0.5 percentage point increase in the ratio took effect on Monday.
Inflation concerns eased after Wen wrote in the Financial Times newspaper that "China has made capping price rises the priority of macro-economic regulations and introduced a host of targeted policies. These have worked."
He added the overall price level now is within a controllable range and is expected to drop steadily.
China's top leaders will gather early next month to determine the direction of economic policy in the second half of this year.
"We expect that economic data for August will show a positive economic situation," Haitong Securities wrote in a note. "Inflation will be tamed as the legacy impact of fast inflation last year is absorbed, while economic growth will be sustained by construction of affordable homes and strong exports."
Meanwhile, oil prices hovered around US$91 per barrel during after hours trading in the US.
The International Energy Agency on Thursday announced it will release 60 million barrels of reserves as an attempt to counter high energy prices and global inflation. The price fell 5.5 percent to US$90.40 a barrel on Thursday.
But analysts said the impact on oil prices may be only temporary.
Airlines led yesterday's gains on speculation that a lower oil price will boost profits. Air China jumped 6.4 percent to 9.88 yuan. China Eastern climbed 4.4 percent to 5.20 yuan.
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