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RRR cut fails to spur rise in mainland exchanges

2015-02-06 07:52 Global Times/Agencies Web Editor: Qin Dexing
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Chinese stock markets declined on Thursday, after an injection of more money into the system by the central bank failed to impress investors who are worried about an ongoing crackdown on high-leverage trading.

The benchmark Shanghai Composite Index fell by 1.18 percent or 37.60 points to 3,136.53 points on Thursday. The Shenzhen Component Index declined by 0.46 percent or 50.97 points to 11,065.58 points.

The CSI 300 Index of the biggest companies traded on the bourses in Shanghai and Shenzhen closed down by 1.02 percent at 3,366.95 points.

Total turnover on the two bourses was 632.00 billion yuan ($101.13 billion), up from Wednesday's 534.40 billion yuan.

The markets jumped more than 2 percent in morning trading on Thursday after the People's Bank of China (PBC), the central bank, on late Wednesday cut banks' reserve requirement ratio for the first time in two years in an attempt to boost the slowing economy. But the positive sentiment failed to last long and the bourses closed down.

"The cut was largely priced in to the stock market (already), but it has reconfirmed an important message to investors that China's monetary cycle has firmly shifted to the loosening camp," Jing Ning, portfolio manager at Fidelity Worldwide Investment, wrote in a note to clients.

"The next question is whether this is followed by a rate cut by the PBC. We will not see the impact of last November's rate decision on the economy until the end of this quarter."

ChiNext, China's NASDAQ-style board for high-tech and fast-growing start-ups, rose by 0.94 percent or 16.57 points to 1,774.31 points.

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