Economy

Stocks fall after PBOC's weekend rate hike

(Xinhua)
Updated: 2010-12-27 19:24

BEIJING -- Chinese stocks weakened Monday after the nation's central bank hiked rates on Saturday and amid speculation further monetary policy tightening to combat inflation is in the offing.

The benchmark Shanghai Composite Index fell 1.9 percent, or 53.76 points, to finish at 2,781.4, following the central bank's decision to raise the benchmark one-year lending and deposit interests rate by 0.25 percentage points, its second rate hike in just over two months.

Related readings:  China's central bank raises interest rates again  China central bank outlines 2011 focus  China central bank highlights stable prices  CPI reach 28-month high  December CPI likely below 5%: NDRC

The Shenzhen Component Index fell 2.02 percent, or 253.66 points, to end at 12,303.19 points.

Combined turnover increased to 224.44 billion yuan (US$33.85 billion) from 185.28 billion yuan the previous trading day.

Losers outnumbered gainers 834 to 76 in Shanghai and 1,125 to 89 in Shenzhen.

China's consumer price index (CPI), a main gauge of inflation, rose to a 28-month high of 5.1 percent year on year in November.

Besides hiking rates, China's central bank has increased banks' reserve requirement ratio six times this year, taking it to 19 percent for some banks.

Shares of property developers dropped. China Vanke, the nation's largest real estate developer, lost 2.89 percent to 8.75 yuan. China Everbright Bank fell 3.7 percent to 3.91 yuan. PetroChina, China's biggest oil producer, declined 2.28 percent to 11.16 yuan.

Coal producer shares gained 1.74 percent amid gains in international crude oil prices.

China Shenhua Energy Co., China's biggest coal producer, climbed 0.02 percent to 25.05 yuan.