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Stocks rocket despite ratio rise

By Zhang Ran (China Daily)
Updated: 2007-05-01 09:06

China's stock market ended at record highs yesterday on the last trading day of April, despite a central bank announcement the previous day that it would raise the reserve requirement ratio for banks to help curb lending growth.

TheShanghaiComposite Index surged 2.16 percent to end at 3841.27 points, the highest-ever close. The Shenzhen Composite Index rose 1.6 percent to 1,064.77, also a record closing high.

The market is closed the rest of the week for the Labor Day holiday, but may continue to climb after the break, with the Shanghai index likely to test the 4,000 level by mid-May, analysts said.

The market reopens May 8.

"Sentiment is stable, as the latest reserve requirement ratio reduces the possibility of a near-term interest rate hike," Tao Zhifeng, an analyst at CSC International Holdings, said.

On Sunday, the People'sBank of Chinasaid it will raise the amount of money banks must hold in reserve for the fourth time this year, reducing the amount available for lending in a new effort to cool an investment boom.