Stocks up despite interest rate rise

SHANGHAI: The Shanghai stock market edged up yesterday despite the unexpected announcement of an interest rate hike by the central bank late on Tuesday.

The People's Bank of China raised the one-year benchmark deposit rate by 27 basis points to 3.6 percent and the one-year lending rate by 18 basis points to 7.02 percent, effective from yesterday.

Analysts said the rate rise will not have a negative impact on the stock market, which has plentiful liquidity. China still faces the problem of liquidity inflows, backed by the expectation of currency appreciation, which was further strengthened by the narrowing of the interest rate between the US and China.