肺炎需要住院治疗吗:China's interest rate hike sends markets slipping

US crude drops as traders react to Christmas day rise
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Martin Farrer and agencies
guardian.co.uk, Monday 27 December 2010 21.26 GMT
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China raised interest rates on Saturday for the second time in just over two months. Photograph: Aly Song/REUTERSFears that further interest rate rises in China could dampen demand in the new emerging economic superpower sent stock markets and oildownwards from year highs today.
US crude fell to $90.96 (£58.90) as traders digested the implications of the surprise rate rise announced by China on Christmas Day while the Dow Jones industrial average and stock markets in Europe and Asia also slipped back.
Earlier, oil had reached a 26-month high as the first widespread blizzards of the winter hit the north-east of America, a heavy oil-consuming region.
Oil prices have climbed 35% since this year's low in May, driven by the combination of a weakened US dollar and unusually cold weather in Europe.
However, concerns that China may have to increase interest rates further to choke off soaring demand and the threat of inflation put a brake on the rally.
China, the world's second-biggest oil burner after the US, raised interest rates 25 basis points to 5.81% on Saturday – the second time in just over two months it has resorted to increasing borrowing costs to control inflation, which reached 5.1% in November. Markets had expected the rate rise but the timing came as a surprise. When China last raised interest rates in mid-October, oil fell 4%.
Unusually, premier Wen Jiabao made a radio broadcast to calm fears that food prices, already up 11% this year, will continue to climb. Wen claimed the government had taken important steps to cap prices and restrain inflation in 2011.
Analysts said it was becoming clear that officials were determined to cool a rapidly overheating Chinese economy.
"What it does show is that China is serious when it says 2011 is going to be the year of prudent fiscal policy," said Olivier Jakob, of analysts Petromatrix. "Further Chinese interest rate hikes will now be expected for 2011."
Stock markets around the world slipped today in response to the news from China, although trading was light as the holiday period continued in many countries. After reaching a year high last week, the Dow dropped 0.21% to 11,549 while in European trade, France's CAC 40 fell 1.2% and Germany's DAX was down 1.4%.
Shares in European carmakers bore the brunt of the falls after an announcement last week by Beijing that it was introducing new measures to limit new car registrations to tackle congestion there in the Chinese capital.
Daimler, Peugeot, Porsche, BMW and Volkswagen, which have all benefited from China's increase in vehicle ownership, fell between 2.1% and 5.6%. "They may do the same in other cities in China, and it will hurt German makes like Daimler," said Heino Ruland, strategist at Ruland Research in Frankfurt. "Banks are also suffering with the China rate hike and it looks as if Portugal will be forced to accept the IMF and EU rescue package."
"In the long run, this is going to be healthy for the Chinese economy, but the instinctive market reaction is that this is going to be bad for global demand, giving investors a reason to sell off equities," said Quincy Krosby, market strategist with Prudential Financial in Newark, New Jersey.
"An increase in interest rates is no good to the market, and it comes amid deep concerns of more interest rate rises early next year," said Liu Kan, an analyst at Guoyuan Securities in Shanghai.
The threat of rising inflation fuelled by oil prices is also a worry for policymakers at the Bank of England and for the chancellor, George Osborne. Inflation in the UK stands at 3.3%, stubbornly above the Bank's 2% target. A growing number of experts believe that, with tax rises planned for the new year, it could rise further and make a first rise in interest rates for more than two years necessary.
Other analysts predicted that the rally in commodity prices seen in recent months had further to run. Mark Pervan, senior commodities analyst at ANZ, said: "This certainly doesn't spell the end of the commodities boom or the strong China story. It's a smart move that may have caught the market off guard."
Commodities began to rise strongly several months ago, coinciding with the wider financial markets rally in the wake of US quantitative easing that weakened the dollar. A weaker dollar stokes buying in dollar-denominated commodities, such as oil, because they become relatively cheaper for holders of other currencies.
Any real increase in demand and a subsequent drop in inventories could persuade oil producers' group Opec to increase production, but earlier this month ministers left existing output targets unchanged.
Ministers have said they would not increase output if a price rally were based on speculation rather than fundamentals of supply and demand.
Arab members of Opec met at the weekend in Cairo, when Kuwait's oil minister said the global economy could withstand an oil price of $100 a barrel. Other exporters indicated Opec might decide against increasing output throughout 2011 as the market was well supplied.