Shares rise as liquidity woes ease on repos

Shanghai stocks ended higher yesterday as liquidity worries eased as China's central bank conducted 160 billion yuan (US$26 billion) worth of reverse repurchase agreements.

The Shanghai Composite Index added 0.5 percent to 3,173.42 points.

The People's Bank of China yesterday conducted 80 billion yuan of 14-day reverse repos at an interest rate of 4.1 percent, and 21-day reverse repos worth 80 billion yuan at a rate of 4.4 percent.

Minsheng Securities said hopes for a looser monetary policy had risen after China's inflation stayed at around five-year lows for the last few months on a slowing economy.

China's Consumer Price Index rose 0.8 percent year on year last month, marking the lowest reading since November 2009.

Meanwhile, the Producer Price Index shed 4.3 percent for its 35th consecutive monthly decline.

Telecommunications firms rose amid rumors, later denied, that China Unicom will merge with China Telecom.

China Unicom surged by 8.37 percent to end at 4.92 yuan, and Datang Telecom Technology rose 2.18 percent to close at 19.21 yuan.