SHANGHAI: Chinese shares rose to a new four-year high yesterday, extending recent gains as financial shares jumped on hopes of further monetary stimulus measures, dealers said.
The benchmark Shanghai Composite Index soared 2.77 percent, or 85.06 points, to 3,157.60 on turnover of 488.9bn yuan ($79.9bn). The index rose 1.58 percent over the week.
The close marked the highest since November 8, 2010 when the Shanghai index ended at 3,159.51 points. The Shenzhen Composite Index, which tracks stocks on China’s second exchange, rose 1.04 percent, or 14.86 points, to 1,439.48 on turnover of 221.2 billion yuan. It lost 1.78 percent for the week.
Chinese shares jumped more than three percent on Thursday after the government announced new corporate support policies aimed at boosting the economy.
The Shanghai index has gained over 20 percent since the central People’s Bank of China (PBoC) announced a surprise interest rate cut in late November. The market has experienced wide swings with hectic market turnover since then.
China Business News reported yesterday that the PBoC would allow banks to enlarge their deposit base by adding deposits from non-bank financial institutions, while setting the reserve requirement ratio (RRR) — the amount of money banks must keep on hand — for these institutions at zero. The report cited an unidentified analyst as saying that such a move would have the same effect as cutting the RRR by giving banks more money to lend.
Securities firms were among the biggest winners yesterday. Shanghai-listed Industrial Securities surged by its 10 percent daily limit to 15.25 yuan while Shenzhen-listed Shanxi Securities also rose 10 percent to 16.36 yuan.
Banks extended further gains, with Industrial and Commercial Bank of China gaining 3.59 percent to 4.62 yuan while Agricultural Bank of China added 3.59 percent to 3.46 yuan.
Wall Street stocks yesterday rose in opening trade as the positive momentum from this week’s US economic growth report lifted the market higher. Five minutes into trade, the Dow Jones Industrial Average stood at stood at 18,061.10, up 30.89 points (0.17 percent). The Dow had gained six straight sessions and jumped above 18,000 for the first time on Tuesday.
Agencies
