China Shares Likely To Fall On Latest RRR Hike
China shares will likely fall tomorrow following PBOC's announcement this evening that reserve requirement ratio for Chinese banks will increase to 15% from 14.5%, effective from Jan. 25. 'The Shanghai index tumbled 2.8% today and now comes a RRR hike announcement. It was not expected at this time and will make investors wonder whether the December CPI figure that's going to be released this week will be really high.
Caution will rein tomorrow,' says Essence Securities analyst Zhu Haibin. Shanghai Composite index fell 2.8% to 5290.61 today, tipped to eye
psychological support at 5200 tomorrow. Banks may lead fall on trimmed lending capacity, property developers may also suffer because mortgage loans will be more difficult to come by after hike, says Zhu. Shenzhen index ended down 2.4% at 1538.36.
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