Market Opener: Oil players in focus after China hikes fuel prices
State-owned oil giants Sinopec (0386.HK) and PetroChina (0857.HK) could be set for gains on Tuesday after China overnight decided to hike fuel prices, which is expected to improve refining margins at both groups which have suffered a flood of red ink at their refining operations.
Gasoline's ceiling price rose by 550 yuan a tonne and diesel by 540 yuan, effective today, the National Development and Reform Commission (NDRC) said in a statement on its website yesterday.
PetroChina and Sinopec suffered huge refining losses in the first half as China cut fuel prices three times between May and July to the lowest level since December 2010. The two firms lost 23.2 billion yuan and 18.5 billion yuan during the period respectively.
On Monday, US stocks fell ahead of a key meeting from the Federal Reserve later this week. The Standard & Poor's 500 Index closed down 0.61 per cent at 1,429.08. The Nasdaq Composite Index dropped 1.03 per cent to 3,104.03.
In London, the FTSE-100 Index ended almost unchanged, easing 0.03 per cent to finish at 5,793.20. German's DAX rose 0.01 per cent to 7,213.70.
Factors to watch on Tuesday:
-- China has finalised a 12th "five-year plan" to boost domestic trade: report
China's latest plan focuses on such sectors as household appliances, food, electronic trade, household furniture, the Securities Times reported. By 2015, added value from the nation's wholesale, retail, accommodation and catering industries will grow by 11 per cent annually to more than 7 trillion yuan, the report said.
-- China kicks off second-round shale gas auction
China has opened 20 shale gas blocks for auction in its second auction for the shale-basedresource and in a milestone policy change foreign joint ventures have been permitted to join the bid.
-- Railway infrastructure investment jumped in August
Investment in the nation's railway projects jumped by 19 per cent from a year earlier to 39.3 billion yuan, suggesting that the sector is bottoming out, the Economic Information Daily reported. Railway infrastructure from January to July saw sharp year-on-year declines due to tighter financing resources, the paper said.
-- Crisis hits Chinese diary firms again after Bright Dairy scandal
China's Bright Dairy & Food said on Monday it was recalling batches of sour milk. The company said the problem occurred when storage temperatures during the delivery of fresh milk were not at required levels, causing the milk to turn sour.