Shanghai: Coal mining drags stocks to 2-month low

[SHANGHAI] Shanghai stocks finished at their lowest in more than 2 months on Thursday (Oct 28) , led by coal mining as Beijing stepped up efforts to tame coal prices.

The blue-chip CSI300 index fell 0.7 per cent to 4,864.14, while the Shanghai Composite Index lost 1.2 per cent to 3,518.42 points.

Coal firms extended losses, down nearly 7 per cent on the day, amid China's intensifying efforts to cool surging coal prices.

China's state planner has met coal producers and the sector's industry association in the past 2 days to study standards and discuss measures to intervene in coal prices.

The energy sub-index and the resource industries sub-index tumbled 5.8 per cent and 4.6 per cent, accordingly.

But consumption stocks rose, with consumer staples and liquor makers up more than 0.6 per cent.

The coal mining sector is likely to remain volatile as the policy direction of taming coal prices is becoming clearer, Shanxi Securities said in a note.

It said there are some opportunities in the undervalued sectors such as consumer electronics, food and beverage and healthcare.

Real estate firms declined for a fourth straight session and lost 2.3 per cent, as concerns over a planned real estate tax scheme lingered.

Chinese developer Oceanwide Holdings said holders of corporate debt issued by 2 of its offshore units have taken possession of the debt's collateral after the units failed to repay the maturing notes, the latest illustration of financial strains on Chinese developers.

Separately, China will defer some taxes for manufacturing firms for 3 months from November due to the impact of high raw material prices and rising production costs, the country's Cabinet said.

REUTERS