Thursday, January 20, 2011

China shares end down on liquidity crunch, data

SHANGHAI: China's key stock index ended down 2.9 percent on Thursday, Jan 20, weighed by banking and commodity stocks, as the latest economic data pointed to the need for a continuation of monetary tightening while a liquidity crunch in the money market capped trading flows.

The benchmark Shanghai Composite Index fell to 2,677.7 points after 2010 economic data was published on Thursday, with the latest figures showing growth soaring past expectations while inflation slowed just a touch.

The People's Bank of China has taken a slew of steps since October to dampen inflation, including raising official rates twice and bank reserve requirement ratios four times, which have severely curbed liquidity in the money market. ($1 = 6.6 yuan) - Reuters


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