Market drops as energy shares sink

By Lydia Chen  |   2008-11-20  |     ONLINE EDITION

SHANGHAI’S key stock index fell today, dragged lower by energy stocks after oil prices slumped for a fifth day.

The benchmark Shanghai Composite Index lost 1.67 percent, or 33.71 points, to 1,983.76 points at 3pm.

The Shenzhen Composite Index, which tracks the smaller domestic market, was down 0.10 percent, or 0.58 points, to 556.73 points.

China Shenhua Energy Co and Datong Coal Industry Co, the country’s top coal producers, fell more than 3 percent as lower crude prices reduce demand for other fuels.

Shenhua Energy, the nation’s largest coal producer, fell 3.88 percent to 18.56 yuan (US$2.72). Datong Coal, China’s No. 2, slid 5.05 percent to 12.60 yuan. China Coal Energy Co, the nation’s third-largest coal producer, lost 3.21 percent to 7.23 yuan.

PetroChina, the nation’s largest oil producer and biggest market heavyweight, was down 2.60 percent to 11.60 yuan.

Light, sweet crude for December delivery fell 77 US cents to settle at US$53.62 a barrel on the New York Mercantile Exchange, about where prices were in January 2007.

In London, January Brent crude fell 12 cents to settle at US$51.72 on the ICE Futures exchange.

On the positive side, dairy producers rose today. China will boost lending to dairy producers and give subsidies to milk farmers after a tainted milk scandal shook consumer confidence and eroded sales, the nation’s top economic planning body said yesterday.

Inner Mongolia Yili Industrial Group Co, China’s biggest dairy producer by sales, rose 6.58 percent, to 8.58 yuan. Shanghai-based Bright Dairy & Food Co, the country’s No. 2, climbed 6.65 percent to 4.33 yuan.

In the telecommunications sector, ZTE Corp, China’s second-biggest phone-equipment maker, gained 2.64 percent to 23.68 yuan.
China will issue licenses to domestic wireless carriers to offer 3G services by January, Sina.com reported, citing unidentified people familiar with the situation. Regulators will issue “nationwide experimental licenses” first and more formal ones a year later, the Beijing-based news Website said yesterday.

Shanghai Lujiazui Finance & Trade Zone Development Co and Shanghai Waigaoqiao Free Trade Zone Development Co, two developers based in Shanghai’s Pudong New Area, both jumped the 10 percent daily limit. Lujiazui hiked to 16.19 yuan while Waigaoqiao closed the session at 8.13 yuan.

Shanghai Securities News reported today that a feasibility study is being conducted on Walt Disney Co’s plan to build a theme park in Pudong.

Walt Disney’s plan to build a theme park in Shanghai would give a boost to the city’s economy, the newspaper said, citing an unidentified expert carrying out the feasibility study on the project.

The planned park would be situated in the city’s Huanglou district, about 10 minutes by car from Shanghai Pudong Airport, and negotiations on the project are continuing, it said.