Bank, developer shares strong on RRR cut

Updated: 2011-12-06 08:57


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BEIJING - Chinese stocks closed lower Monday on weak confidence from Chinese investors, but bank and developer shares were strong as the central bank's cuts of reserve requirement ratio start Monday.

The benchmark Shanghai Composite Index dropped 1.16 percent, or 27.43 points, to close at 2,333.23.

The Shenzhen Component Index dropped 2.26 percent, or 222.15 points, to close at 9,586.08.

Combined turnover shrank to 96.55 billion yuan ($15.25 billion) from 111.29 billion yuan on the previous trading day.

Losers outnumbered gainers by 864 to 63 in Shanghai, and 1,273 to 84 in Shenzhen.

The People's Bank of China, or the central bank, on Wednesday lowered commercial banks' reserve requirement ratio (RRR) by 50 basis points, and the new policy began to take effect on Monday.

The latest cut drops the RRR to 21 percent for large commercial banks and 17.5 percent for small and medium-sized banks. An estimated 396 billion yuan in capital will be released into the market.

Shares in banks and property developers gained from the central bank's latest move.

China Construction Bank gained 1.68 percent to close at 4.83 yuan per share, while the Agricultural Bank of China rose 0.75 percent to 2.6 yuan.

Poly Real Estate, China's second-largest developer by market value, gained 0.83 percent to 9.77 yuan, while China Vanke, the country's biggest developer dropped 1.22 percent to 7.29 yuan.