China raises banks' reserve ratio by 50 bps for 2nd time in two weeks
Along with officially raising reserve requirements five times this year, China has increased interest rates once and restricted lending by banks.
By Agencies |
BEIJING: China on Friday said it would raise banks' reserve requirements by 50 basis points, effective Nov. 29, the second time in two weeks.
Chinese markets have tumbled in recent days on concern that the government would ratchet up its monetary tightening after inflation sped to a 25-month high in October.
Along with officially raising reserve requirements five times this year, China has increased interest rates once and restricted lending by banks.
Chinese shares rebounded in afternoon trade on Friday, helping the Hong Kong market recoup most of its losses.
The Shanghai Composite Index closed up 0.8 percent at 2,888.6 points, hovering just below the 250-day moving average, after gaining 0.9 percent on Thursday. The index still lost about 3 percent over the week, extending a sharp fall since last Friday.
The index darted up in the last half an hour of trade, after falling close to 2 percent in the morning session.
Shanghai shares have had a rollercoaster year, dropping nearly 30 percent by early July after a clampdowns on bank lending and official measures to curtail the country's real estate fever.
But investor sentiment rebounded in October with the index jumping some 12 percent on the month on hopes of more capital flows entering the domestic market.
Volume rose on Friday but remained far below highs seen in October's liquidity fueled rally. Turnover of Shanghai A shares edged up to 155 billion yuan ($23.36 billion) from 127 billion yuan.
Chinese markets have tumbled in recent days on concern that the government would ratchet up its monetary tightening after inflation sped to a 25-month high in October.
Along with officially raising reserve requirements five times this year, China has increased interest rates once and restricted lending by banks.
Chinese shares rebounded in afternoon trade on Friday, helping the Hong Kong market recoup most of its losses.
The Shanghai Composite Index closed up 0.8 percent at 2,888.6 points, hovering just below the 250-day moving average, after gaining 0.9 percent on Thursday. The index still lost about 3 percent over the week, extending a sharp fall since last Friday.
The index darted up in the last half an hour of trade, after falling close to 2 percent in the morning session.
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Shanghai shares have had a rollercoaster year, dropping nearly 30 percent by early July after a clampdowns on bank lending and official measures to curtail the country's real estate fever.
But investor sentiment rebounded in October with the index jumping some 12 percent on the month on hopes of more capital flows entering the domestic market.
Volume rose on Friday but remained far below highs seen in October's liquidity fueled rally. Turnover of Shanghai A shares edged up to 155 billion yuan ($23.36 billion) from 127 billion yuan.
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