Thursday, October 28

Shanghai shares fall as power crunch weighs

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SHANGHAI — Shanghai shares fell on Monday as recent power curbs began to weigh on economic outlook, while energy and consumer staples led Hong Kong stocks higher.

The Shanghai Composite Index lost 1.3% to 3,565.94 by the end of the morning session, while the CSI300 index rose 0.3% to 4,861.58.

The Hang Seng index added 0.3% to 24,259.75. The Hong Kong China Enterprises Index was unchanged at 8,604.72.

** The energy sub-index dropped 1.6% amid intensified power crunch in recent weeks. Beijing has vowed to resolve supply shortages and curb price rises as the peak winter consumption season approaches.

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** The power curbs caused by Beijing’s carbon emission targets and surging coal prices and coal shortages have disrupted production in some companies, sending their share prices lower.

** Power-intensive sectors resources, non-ferrous metals, chemicals dropped sharply.

** “The power crunch has prompted us to further cut our year-on-year Q3 and Q4 GDP growth forecasts to 4.7% and 3.0%, respectively, from 5.1% and 4.4%,” Ting Lu, chief China economist at Nomura, said in a note.

** Consumer staples surged 5.2% ahead of the week-long National Day holiday starting from Oct. 1, which has traditionally been a peak season for consumption.

** The Ministry of Commerce said China would ensure sufficient market supply with rich varieties and stable prices during the National Day holiday, state media CGTN reported on Sunday.

** In Hong Kong, energy and consumer staples led the gains, up 1.7% and 1.4%, respectively.

** China’s state-run oil and gas major CNOOC Ltd jumped 5.7% on its Shanghai listing plan, making it the biggest gainer on the Heng Seng Index.

** China Evergrande’s electric car unit plunged more than 10%, after it warned it faced an uncertain future unless it got a swift injection of cash and after it said it would not proceed with plans to issue RMB shares.

(Reporting by Shanghai Newsroom; Editing by Subhranshu Sahu)