China Region Indexes Higher; Resource, Bank Sector Stocks Down

Chandrasekhar Atreya
14 Dec, 2010
New York City

Stocks in China region edged higher but resource stocks fell. Banks also edged lower after China lifted bank reserve ratios of six select banks by 50 basis points to 19%. Premier Wen Jiabao is scheduled to reach India on Wednesday with the largest ever trade delegation.

[R]5:00 PM Hong Kong, China – Stocks in China region edged higher but resource stocks fell. Banks also edged lower after China lifted bank reserve ratios of six select banks by 50 basis points to 19%. Premier Wen Jiabao is scheduled to reach India on Wednesday with the largest ever trade delegation.[/R]

Stocks in China region edged higher but resource and bank sector stocks declined. China reported a flood of economic data this weekend that showed rising industrial production, retail sales and surging inflation.

The Shanghai Composite Index added 0.14% or 4.12 to close at 2,927.08. The CSI 300 Index gained 0.26% or 8.41 to close at 3,269.47.

The Hang Seng Index in Hong Kong gained 0.30% or 70.72 to close at 23,387.83.

Premier Wen Jiabao will arrive in New Delhi on Wednesday on a six day visit to India. His visit will be the first to India by a Chinese premier in four years and comes a month after U.S. President Barack Obama’s trip.

He will be accompanied by the largest ever trade delegation of 400 businessmen. China and India are expected to sign $20 billion of deals.

China has extended a selective rise of the reserve ratio requirement for six large banks for a period of another three months, after the expiry of the initial two month trial period, in its latest move to soak up liquidity, industry sources said on Monday.

After the extension of the selective increase, the reserve ratio for these six banks will be a record 19%. The six banks are the Industrial & Commercial Bank of China, China Construction Bank, Bank of China, Agricultural Bank of China, China Merchants Bank and China Minsheng Banking Corp.

New homes sold in Shanghai last week were about 10% cheaper as developments in outskirts of the city dominated the best selling projects.

The average price of new homes, excluding those built for residents under urban redevelopment plans, fell from a week earlier to 21,146 yuan per square meter across the city, Shanghai Uwin Real Estate Information Services said on Monday.

Shanghai’s industrial production expanded 16.7% in November from a year earlier to 270.1 billion yuan, the same pace as in October, the Shanghai Statistics Bureau said on Monday.

Comparatively, China’s industrial production accelerated 13.3% in November from a year ago, up 0.2% from that in October.

The People’s Bank of China said it will make further efforts to maintain the prices stable after the country’s inflation reached a 28-month high, according to reports on Monday.

The central bank said it will enact firm monetary policies and seek to control liquidity, channeling credit funds to real businesses such as agricultural and small and medium-sized enterprises.

Stock Movers

PetroChina dropped 1.1% to 11.82 yuan after crude prices fell in New York. China Petroleum & Chemical Corp, also known as Sinopec, lost 0.8% to close at 8.29 yuan.

Bank stocks declined after China raised reserve ratio requirement by 50 basis points.

ICBC, China’s largest lender, fell 0.2% to 4.27 yuan and Agricultural Bank of China dropped 0.4% to 2.65 yuan.

Jiangxi Wannianqing Cement jumped the daily limit of 10% to 13.09 yuan after declaring that net income may rise 100% to 150% this year on increased sales and product prices.

Anhui Conch Cement Co rose by 4% to 30.76 yuan.

Among software companies China National Software gained 3.2% to 24.30 yuan while Shandong Langchao Cheeloosoft Co surged as much as 7.2% to reach 17.77 yuan.