Measures fear damps key index
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Shanghai's key stock index yesterday fell for a second day over concerns that the central government may unveil tightening measures ahead of a three-day national holiday.
The Shanghai Composite Index dipped 0.1 percent to 2,955.77. Turnover shrank to 153 billion yuan (US$23 billion) from 200 billion yuan on Tuesday.
"Total turnover in Shanghai and Shenzhen bourses dropped 20 percent from Tuesday as investors are watching," said Zhang Gang, an analyst at China Central Securities. "The growth of blue chips, driven by positive earnings, may halt as most companies have released their annual reports."
China may raise both reserve requirements for banks and interest rates in April to stave off inflationary risks, China Securities Journal said yesterday.
The People's Bank of China, the central bank, has withdrawn money from banks through both open market operations and an increase in reserve requirement ratio this month - a rare occasion for the two measures to be implemented in the same month.
The seven-day repurchase rate, measuring the cost of borrowing money among banks, rose yesterday, according to market watchers.
The property sector retreated after China's banking regulatory body said it would tighten inspection over credit risks. Poly Real Estate Co dropped 2.8 percent to 13.60 yuan. Gemdale Corp fell 1.6 percent to 6.85 yuan.
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