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China stocks slump over liquidity shortage concerns

English.news.cn   2013-12-20 16:50:11            

BEIJING, Dec. 20 (Xinhua) -- Chinese shares slumped more than 2 percent on Friday, as concerns over tight liquidity persist despite intervention from the central bank.

The benchmark Shanghai Composite Index tumbled 2.02 percent, or 43 points, to finish at 2,084.79. The Shenzhen Component Index fell 2.22 percent, or 180.99 points, to finish at 7,966.72.

Total turnover on Shanghai and Shenzhen bourses rose to 153.55 billion yuan (25.09 billion U.S. dollars) from 140.06 billion yuan on the previous trading day.

The central bank announced late Thursday that it had injected liquidity into the market via short-term operations "recently" because of growing concerns of tight money supply toward the end of the year.

Despite the action, the interbank bond repurchase rates climbed on Friday with the rate for one-day products rising 12 basis points to 3.95 percent, and the seven-day rate increasing 100 basis points to 7.6 percent.

The Shanghai Interbank Offered Rate (Shibor), which shows the cost of interbank borrowing, also gained, with the overnight Shibor rising 8.1 basis points to 3.93 percent. Seven day and two week rates both increased sharply to 7.65 percent and 7 percent respectively.

The suspension of reverse repurchase operations by the central bank has also added to worries of a possible liquidity crunch as seen in June. The weak performance of the markets was also a response to the U.S. Federal Reserve's decision to start tapering its quantitative easing by reducing its asset-purchasing program from 85 billion dollars to 75 billion dollars beginning from January.

The China CITIC bank slumped 8.67 percent to 3.58 yuan per share. China Construction Bank fell 6.16 percent to 3.96 yuan, while the Inner Mongolia Baotou Steel Rare-earth Hi-tech Co., Ltd. dived 9.49 percent to 21.74 yuan.


Hong Kong stocks close down 0.45 pct by midday

HONG KONG, Dec. 20 (Xinhua) -- Hong Kong stocks moved down 102. 86 points, or 0.45 percent to close Friday's morning session at 22, 785.89 points. Full story

Nikkei ends 0.5 pct lower in morning on profit-taking

TOKYO, Dec. 20 (Xinhua) -- Tokyo stocks ended 0.5 percent lower in the morning session of Friday, with investors seeking to lock in recent gains after the index soared 4.7 percent over the last three days.

The 225-issue Nikkei Stock Average shed 79.28 points, from Thursday to 15,779.94. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 6.04 points, or 0.48 percent, at 1,257.03. Full story

Wall Street ends little changed as investors take breather

NEW YORK, Dec. 19 (Xinhua) -- U.S. stocks closed narrowly mixed Thursday, as many investors chose to stay on the sidelines after a huge market rally spurred by the Federal Reserve's prudential move to dial back its bond purchases.

The blue-chip Dow Jones Industrial Average inched up 11.11 points, or 0.07 percent, to 16,179.08. The broader S&P 500 shed 1. 05 points, or 0.06 percent, to 1,809.60. The tech-rich Nasdaq Composite Index gave up 11.93 points, or 0.29 percent, to 4058.14. The Dow set a record closing high for a second straight day. Full story

Editor: Shen Qing
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