Mainland markets reached new highs today driven by strong rises by oil refiners, coal producers and brokerages. Profit-taking after recent rises brought down Hong Kong.
The Shanghai Composite Index advanced 2.6 percent, with 749 stocks all rising and only 113 going down. The Shenzhen Composite Index rose 1.53 percent. The Hang Seng Index sank 1.3 percent. Taiwan's Taiex added 0.5 percent.
Sinopec (SH:600688, HK:0338) surged to the 10 percent limit on Shanghai and 3.76 percent on Hong Kong, as posted a slower decline in fuel sales in the second quarter. Domestic sales of oil products fell 4.6 percent in the second quarter compared to 12 percent in the first quarter. Analsyst have said that profits may triple for the refining giant, which has benefitted from lower world crude prices. PetroChina (SH:601857, HK:0857) also jumped 5.32 percent.
Coal shares also performed well. Both Datong (SH:601001) and Anhui Hengyuan (SH:600971) rose to the daily 10 percent limit. Shanxi Xishan Coal and Electricity Power Co Ltd (SZ:000983) added 4.91 percent.
In what is the world's largest IPO this year, China State Construction's shares at a price 51 times higher than earnings. Brokerage stocks had another good day with Changjiang Securities (SZ:000783) rising 8.46 percent, Citic Securities (SH:600030) adding 4.82 percent and Haitong Securities (SH:600837) up 2.38 percent.
Beijing announces 50 percent subisidy for all solar projects
A post on the Ministry of Finance website yesterday evening said the government would "in principle" subsidise 50 percent of the costs of building and distributing electricity from any solar power project.
It is calling the project "Golden Sun", and aims to have installed at least 500 megawatts of solar farms across the country in the next three years. The subsidy may even go up to 70 percent for projects in areas remote from the grid system.
Chinese solar companies listed in New York, surged overnight. Suntech (NYSE:STP) rose 9 percent. Renesola (NYSE:SOL) increased 4 percent. LDK Solar (NYSE:LDK) surged 15 percent.
In Shanghai Wuhan Linuo Solar Energy Group Co (SH:600885) surged 10 percent. Baoding Tianwei Baobian Electric (SH:600550) gained 2.1 perecent. Shenzhen Topraysolar (SZ:002218) rose 2.4 percent in Shenzhen. In Hong Kong, China Singyes Solar Technologies (HK:0750) rose 4.4 percent.
China may have to accept iron-ore deal
The government-controlled English paper, China Daily, today reported that China may be forced to accept the 33 percent discount in full-year iron-ore contracts being offered by the global mining giants if the Japanese and South Korean economies continue to recover.
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