Saturday, October 23

Shanghai, Hong Kong stocks fall on overnight Wall Street losses, China power crunch

Article content

SHANGHAI — Shanghai and Hong Kong shares dropped on Wednesday, tracking overnight Wall Street losses and hit by China’s worsening power crunch, as investors exited Chinese stocks vulnerable to factory shutdowns including chemicals and steelmaking.

The CSI300 index fell 1.1% to 4,828.41 at the end of the morning session, while the Shanghai Composite Index lost 1.8% to 3,537.60.

The Hang Seng index dropped 0.5% to 24,389.78. The Hong Kong China Enterprises Index lost 0.8% to 8,654.36.


Article content

** Analysts said China’s power supply crunch, which has shut factories across the country, may pose a much bigger threat to the economy than the debt crisis at Evergrande Group.

** Investors shunned industries vulnerable to power shortages, with non-ferrous metal, steel, chemicals plunging between 3% and 5%.

** China sought to reassure residents and businesses, urged railway companies to strengthen coal transportation and asked local governments to closely monitor the supply, demand and inventories of coal at power plants.

** The energy sub-index and the coal sub-index tumbled more than 4.9% each.

** China’s central bank governor Yi Gang said China will stay with normal monetary policy settings for as long as possible.


Article content

** The Hang Seng Tech Index dropped 2.2%, tracking sharp declines on Wall Street on rising Treasury yields and deepening concerns over persistent inflation.

** The energy sector lost 3.3% as oil prices fell on demand concerns, while coal-related stocks plunged amid China’s power crunch.

** The materials sector declined nearly 4%.

** Bucking the trend, property and financials gained, after cash-strapped Evergrande Group said it planned to sell a $1.5 billion stake it owns in Shengjing Bank Co Ltd to a state-owned asset management company. The developer jumped over 10%.

** Beijing is prodding government-owned firms and state-backed property developers such as China Vanke Co Ltd to purchase some of Evergrande’s assets, people with knowledge of the matter said.

(Reporting by Shanghai Newsroom; Editing by Rashmi Aich)


In-depth reporting on the innovation economy from The Logic, brought to you in partnership with the Financial Post.


    Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

    Leave a Reply

    Your email address will not be published. Required fields are marked *