Shanghai, HK Stocks Drop; China Raises Fuel Prices by 3%

Chandrasekhar Atreya
26 Oct, 2010
New York City

Stocks in China region dropped after China raised fuel prices at midnight by 3%. Average new home price in Shanghai stays above 20,000 yuan per square meter for the fifth week in a row, as unit sales decline.

[R]5:00 PM Hong Kong, China – Stocks in China region dropped after China raised fuel prices at midnight by 3%. Average new home price in Shanghai stays above 20,000 yuan per square meter for the fifth week in a row, as unit sales decline.[/R]

China stocks dropped in choppy trade after China raised fuel costs by 3%. Stocks in Hong Kong also dropped tracking losses in Shanghai and the slide in the U.S. dollar.

The CSI 300 Index in China dropped 0.43% or 15 points to close at 3,466.08. Hang Seng Index in Hong Kong lost 0.11% or 26.67 to close at 23,601.24.

Motorists across China will have to pay up to 3% more for fuel from Tuesday, after the government in a surprise move decided to raise the price of fuel at midnight. The latest price increase lifts the fule prices back to the June prices when they were lowered last.

The National Development and Reform Commission raised the price of gasoline by 230 yuan a ton, or 0.17 yuan a liter, and diesel by 220 yaun a ton or 0.19 yaun a liter.

The average price of new homes in Shanghai remained above 20,000 yuan per square meter for the fifth consecutive week as the number of home sales contract decline.

A total of 319,000 square meters of new homes were sold across the city during the week ended October 25, up 8% from the previous week, Shanghai UWin Real Estate Information Services Co said Monday.

Energy demand growth is set to slow further in the final quarter of 2010 in China even though demand for gas could be tighter this winter.

The National Energy Administration said Monday growth in use of energy may slow in this quarter after easing in the July September quarter, citing efforts made by the government to spur energy conservation.

Golden Eagle Retail Group Ltd, a Chinese department store chain operator listed in Hong Kong said Monday in Shanghai that it plans to increase number of stores on the mainland.

The company plans to have more than 30 stores in 20 cities in the next three years, from the current 19 stores in 13 cities. These stores will help add a minimum of 800,000 square meters of retail space, said Roger Wang, Chairman and CEO of the company in Shanghai.

China Central Television said it sold 2011 ad spots for more than 1 billion yuan, with Shunde-based electronics manufacturer Midea Group replacing Proctor and Gamble as its largest client, the head of the ad division of the company said Tuesday.

CCTV’s tendering process this year had three steps, application, online invitation and auction.

A deal to reduce technical barriers for exports by local firms was signed between Shanghai’s Entry-Exit Quarantine and Inspection Bureau and the national agency.

A survey of 100 firms conducted since 2005 found that about 30% to 40% of companies are affected by technical barriers to exports. The barriers cover food and agricultural produce as well as electrical and chemical products.

Under the deal, the General Administration of Quality Supervision, Inspection and Quarantine will provide information on product standards and regulations in other countries, as well as information on unqualified products exported from Shanghai.