China's shares prices close higher despite interest rate hike

China's stock markets remained unaffected by the central bank's latest interest rate hike on Monday, with the benchmark Shanghai Composite Index closing higher.

The index, which covers both A and B shares, closed at 3,014.44 points, up 83.96.

The Shanghai A-share Index was up 88.63 points at 3,167.72 and the Shenzhen A-share Index was up 10.03 points at 818.80.

The market had been anticipating the rate hike, which came as no surprise when it was announced on Saturday.

China Life, the Industrial and Commercial Bank of China, the Bank of China and other banks surged more than five percent.

The rate hike only affected industries in great need of capital, like the real estate, steel and auto sectors.

The RMB appreciation is one of the main impetuses for the bullish stock market, analysts say.

The value of the Chinese yuan against the U.S. dollar hit a new high on Monday with a central parity rate of 7.7351 yuan to the dollar, according to the Chinese Foreign Exchange Trading System.

The 16th recorded high of the RMB was driven by the interest rate hike, experts say.

The rate hike reflected the central bank's concern over the trend towards a higher inflation rate and an overheated economy, said Tang Min, chief economist with the Asia Development Bank Mission in China.

China's Consumer Price Index, a major inflation indicator, rose 2.7 percent in February and urban fixed asset investment surged 23.4 percent last month, according to figures from the National Bureau of Statistics.

The one-year rate for deposits increased by 0.27 percentage points to 2.79 percent and that for loans to 6.39 percent, according to the People's Bank of China.

Source: Xinhua