Mainland China share market closed sharp higher in volatile trading on Friday, 26 December 2014, extending gain for second consecutive day, amidst calming liquidity squeeze concerns and speculation the government will take more measures to bolster the economy. The Shanghai Composite rose 2.77% to 3157.60, adding to yesterday's 3.4% gain. For the week, the benchmark index was up 1.6%.
Investors concern about market liquidity calmed as money-market rates dropped after cash locked up to buy new shares returned to the banking system. The seven-day repurchase rate, a gauge of interbank funding availability, declined 151 basis points to 3.70% in Shanghai. Funding needs due to 10 IPOs that started last week drove the repo rate to an 11-month high of 6.18% on Dec. 22.
The Shanghai Composite has rallied 49% this year amid speculation the central bank will cut lenders reserve-ratio requirements to support growth after lowering interest rates for the first time in two years last month.
Powered by Capital Market - Live News
