Bourse down 0.05% in slim volume

09:59, December 17, 2010      

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The nation's key stock index closed down 0.5 percent, near a one-week low in thin volume Thursday, with investors holding off from taking large positions in some financial issues in a policy tightening environment.

Risk adverse investors have targeted buying and selling of financials in line with their expectations of policy moves from the central bank.

While a rise in bank reserve requirements last Friday instead of a rise in interest rates was expected and broadly welcomed, speculative investors are still cautious of buying in.

China should step up efforts to mop up excess liquidity and will continue to use banks' reserve requirements, already at a record high, to do so, central bank governor Zhou Xiaochuan said Wednesday. The Shanghai Composite Index was at 2,898 points, holding firmly above the 250-day moving average, now at 2,860 points.

Most analysts are confident on the outlook for the index in the new year due to reasonable valuations for large cap companies.

Source: Global Times

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