China Stocks Advance


China's stocks advanced after the government raised fuel prices by a record, sparking speculation oil refiners will increase output and end shortages.

China Petroleum & Chemical Corp. and PetroChina Ltd., the nation's two largest oil refiners, gained. The country has experienced fuel shortages and rationing, and the price increases will improve supplies, the National Development and Reform Commission said. Huaneng Power International Inc., the listed unit of China's largest power group, led utilities higher after the commission said it will also boost power tariffs.

The CSI 300 Index jumped 76.59, or 2.8 percent, to 2,849.67 at the 3 p.m. close. All 10 industry groups advanced and three stocks rose for each that fell on the index.

The measure is down 4.4 percent this week, extending a four- week, 23 percent decline. The index has dropped 52 percent from its October peak, wiping out $1.2 trillion of market value, on concern government measures to curb inflation will dent earnings.

The price of gasoline will increase 17 percent today, diesel will rise 18 percent and jet fuel will climb 25 percent, the National Development and Reform Commission said on its Web site late yesterday. China controls fuel prices to limit their effect on inflation.

The government will also boost electricity prices by an average 4.7 percent on July 1 and cap prices of coal burned in power stations until the end of this year, the commission said.

Investors buying more than 5 percent of a Chinese securities brokerage must hold on to the shares for at least three years following the investment to prevent speculation, the nation's securities regulator said late yesterday.

The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, climbed 3 percent to 2,831.74. The Shenzhen Composite Index gained 1.8 percent to 794.75.


TradingEconomics.com, Bloomberg
6/20/2008 7:27:37 AM