SHANGHAI stocks retreated this morning on slumping house prices even though the central bank said it will take a number of measures to maintain steady growth in credit supply.

The Shanghai Composite Index fell 0.14 percent, or 3.28 points, to 2,377.57 with a turnover of 54.3 billion yuan (US$8.6 billion) by the noon break.

In Shanghai, Beijing, Guangzhou and Shenzhen, new home prices dropped between 0.3 percent and 1.1 percent in March from a year earlier. The prices in the four cities lost between 0.2 percent and 0.5 percent month on month, extending losses for the sixth straight month, the National Statistics Bureau said.

Property developers retreated 0.8 percent on average, as home prices fell last month in 46 of the 70 cities monitored by the bureau. China Vanke Co, the nation's biggest developer, lost 0.5 percent to 8.6 yuan. Poly Real Estate Group Co, the second biggest, shed 0.7 percent to 12.1 yuan.

The central bank will "flexibly" adjust the liquidity of the banking system through the reverse repurchase of bills and cuts in the reserve requirement ratio, Xinhua news agency reported yesterday.

Investors expectations for further cuts in the reserve requirement were dispelled after the central bank said excess reserves of financial institutions stood at 180 million yuan by the end of March, reflecting a healthy liquidity level, Reuters reported today, citing an official at the policy maker.

Lenders were mixed. Industrial And Commercial Bank Of China, the nation's biggest lender, lost 0.5 percent to 4.36 yuan, while Bank of China slumped 1 percent to 3.05 yuan. China Minsheng Banking Co, gained 0.2 percent to 6.45 yuan.

Source:shanghaidaily