Shanghai shares fall on nationwide power shortage concerns
07:05, 27 September 2021
Mainland China shares were mixed on Monday as energy-intensive sectors like chemicals and manufacturing fell on power shortage concerns in China.
Chinese factories are being forced to cut output and halt production due to the nationwide power outages with the situation likely to worsen during winter, said state-affiliated Global Times.
The Shanghai Composite index fell as much as 1.5% before paring losses to trade 0.8% lower by Monday afternoon, while the Shenzhen Component index rose 0.2%.
Power shortages in China
“The power shortage in China continues to escalate and hit producers along the supply chain disproportionally. While things are continuing to unfold, the power issue acts as a double-edged sword, hitting smelter production and leading to reduced supply,” said ING in a note.
Conveyor belt manufacturer Zhejiang Damon Technology was the biggest percentage loser on the Shanghai benchmark, dropping over 11%. Chemicals producer Yangmei Chemical and marine transportation firm COSCO Shipping Development fell over 10% each in Shanghai.
Meanwhile, alcohol stocks jumped to help China’s blue-chip CSI 300 index gain 0.9% after Monday’s lunch break.
Liquor stocks jump
Liquor producers dominated the top 10 intraday percentage gainers list on the CSI 300 index, taking up five spots on Monday as Luzhou Lao Jiao and Kweichow Moutai surged 10% and 8%, respectively.
Hong Kong’s Hang Seng index rose 0.6% on Monday as energy giant CNOOC emerged as the top boost on the benchmark index.
CNOOC jumped over 5.8% after the company announced plans to raise $5.4bn by listing on the Shanghai stock exchange to fund oil and gas projects.
Property stocks weak in HK
Property stocks were weak in Hong Kong on Monday following Evergrande’s default on a dollar bond last week. The Hang Seng Properties index was down 0.7% on Monday.
Evergrande’s electric vehicle unit China Evergrande New Energy Vehicle Group extend losses by 11.2% on Monday after having fallen over 20% on Friday.
The company said it will not go ahead with issuing RMB shares on Shanghai’s STAR Board.
Japan muted, Australia up
Elsewhere, Japan’s Nikkei 225 index was muted on Monday as machinery and pharmaceutical losses wiped out energy gains on the benchmark.
Australia’s S&P/ASX 200 index rose 0.5% helped by gains in energy companies on the back of buoyant oil prices. All of the “Big Four” banking stocks traded higher on Monday to lift the benchmark to a 10-day high.
In Southeast Asia, Singapore’s Straits Times index rose 1.3% to hit a near three-week high on Monday.
Read more: Evergrande's electric vehicle unit cancels Shanghai listing
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