Shanghai stocks close nearly 3% up on central bank action

Shanghai stocks close nearly 3% up on central bank action

SHANGHAI stocks ended nearly 3 percent higher yesterday on a central bank announcement that it would slow the floating of its bills. The benchmark Shanghai Composite Index jumped 2.81 percent, or 48.47 points, to 1,771.82. Turnover increased to 39.7 billion yuan (US$5.79 billion) from Monday's 32.2 billion yuan. Gainers outnumbered losers 709 to 154, and 45 remained unchanged. The People's Bank of China yesterday announced it will slow down the floating of central bills. One-year central bills will be floated every two weeks, instead of the one-week circle previously. Experts regarded this action as another means to push banks to increase lending and ensure enough liquidity in the market. The index fell to 1,664.93 points in the morning session, but heavyweights led a rebound in the afternoon. "With the surrounding markets rising and low price earnings ratio in the domestic market, the index is likely to rise more after Monday's sell-off," said Wan Bing, a GF Securities analyst. China Life Insurance Co edged up 0.78 percent to 19.32 yuan. The nation's biggest insurer on Monday said its third-quarter profit fell 46 percent on year due to lower investment returns. "More third-quarter reports will be released this week, and this may bring uncertainties to the market. So we are pessimistic about the market in the short term," said Founder Securities. Financial shares reversed their losses in the morning session. The Industrial & Commercial Bank of China, the nation's biggest lender, rose 2.7 percent to 3.80 yuan. Shanghai Pudong Development Bank added 9.9 percent to 12.10 yuan.