Metals News
Chinese Shares Close Mixed Following Fresh Tightening Move
data analysis
Mar 22,2011

BEIJING, Mar. 22 -- Chinese shares closed mixed Monday after the central bank announced Friday to hike interest rates again.

The benchmark Shanghai Composite Index rose 2.25 points, or 0.08 percent, to 2,909.14.

The Shenzhen Component Index dropped 78.26 points, or 0.62 percent, to 12,643.73.

Combined turnover shrank to 218.67 billion yuan (33.33 billion U.S. dollars) from 222.64 billion yuan the previous trading day.

Losers outnumbered gainers by 504 to 373 in Shanghai and 708 to 458 in Shenzhen.

Gold stocks led the advance on Monday with the index up 2 percent, due to the rise of gold prices in the international market. Stocks related to radiation protection dropped after rising last week and nuclear power stocks gained following losses last week.

The People's Bank of China (PBOC), China's central bank, announced on Friday that it would raise the bank reserve requirement ratio by 50 basis points on March 25.

The hike did not drag down the A-share market as investors were prepared for the move.

Analysts had predicted that the central bank would introduce liquidity tightening measures throughout the first quarter, including interest rate hikes.

But the market was subdued nonetheless due to the central bank's announcement as well as uncertainty in Libya, said Nanjing Securities analyst Wen Lijun.

Most steel producers stocks slumped. Stocks of Inner Mongolia Baotou Steel Union Co., Ltd. dropped 1.31 percent to 6.03 yuan per share. Shares of Chongqing Iron and Steel Company Limited shrank 2.46 percent to 3.96 yuan per share.

Gold, oil and coal soared probably due to what is going on in Libya, said Jinzheng Consulting analyst Chen Zili.

PetroChina Co., the country's largest oil producer, rose 1.56 percent to 11.75 yuan per share. Zijin Mining Group Co., China's largest gold producer, rose 1.44 percent to 7.77 yuan per share.


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