The Annual Shale Gas Technology & Equipment Event
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Hong Kong and Chinese shares rose on Wednesday, lifted by mainland oil majors after Beijing raised fuel prices for the first time in 10 months, but gains were capped by chart resistance ahead of fresh China data later this week.
Extended Greek debt restructuring talks also capped risk appetite, with the Hang Seng Index, up 0.59 percent at 20,822.06 by the midday trading break, but seen capped at about 21,017, the bottom of a 708-point gap that opened between Aug. 4 and 5.
The Shanghai Composite Index was up 0.38 percent at 2,300.59 at midday, again testing the 2,300-2,320 level it has failed to decisively break above on at least two occasions since the start of the year.
The China Enterprises Index of mainland listings in Hong Kong rose 0.66 percent, boosted by strong gains for PetroChina Co Ltd, China Petroleum & Chemicals Corp (Sinopec) and CNOOC Ltd.
Late on Tuesday, Beijing announced that retail prices of gasoline and diesel would rise 3-4 percent from Wednesday, a move that will lift prices to record highs and help refineries improve margins for the country's leading oil producers.
"Some Chinese oil stocks might look a bit overbought in the short term, but this is a strong fundamental change that will further drive investor interest, particularly for those in the sector that are trading at discounted valuations" said Alex Wong, director of asset management at Ample Finance.
Sinopec, up 2.1 percent and CNOOC, 1 percent higher, are trading at a 5 and 17 percent discount to their respective historical mean 12-month forward earnings, according to Thomson Reuters StarMine.
PetroChina, which is trading at 8.7 percent more than its historical mean 12-month forward earnings, gained 2.1 percent to hit the highest intraday level since April 27 last year.
In Shanghai, PetroChina Co Ltd was among the top boosts, up 0.3 percent, while Sinopec slipped 0.4 percent, paring early gains.
CHINA POLICY MOVES DRIVE MARKETS
Chinese property developers also saw some strength after the mainland's central bank said banks must provide loans to first-home buyers, the first clear call to support mortgage lending since the government launched a policy tightening cycle to calm the property market two years ago.
China Resources Land Ltd and China Overseas Land & Investment Ltd rose 2.4 and 1.8 percent, respectively, in Hong Kong, while Poly Real Estate (Group) Co Ltd was up 0.6 percent in Shanghai and China Vanke Co Ltd gained 1.1 percent in Shenzhen.
With Beijing scheduled to post data for January inflation on Thursday, trade on Friday and on loan growth and money supply next week, policy-sensitive Chinese banks were mixed after a series of reports by mainland media.
The official China Securities Journal, citing unidentified sources, reported that the sector extended about 800 billion yuan ($126.89 billion) in new loans in January, including 320 billion yuan from the "Big Four" state lenders.
Another outlet reported on Wednesday that Beijing was planning to roll out new rules on bank capital requirements on July 1 as part of efforts to implement Basel III guidelines to help lenders rein in risk.
Ample Finance's Wong said seasonal factors meant that China data points for January and February could likely offer incomplete clues on the state of the world's second-largest economy.
This could lead global investors to likely veer towards markets in the United States, where data suggests the macro-economic situation is steadily improving, while also benefitting Hong Kong-listed stocks exposed to U.S. demand, such as exporters.
Unconventional natural gas has become a global hotspot. It is changing the pattern of the world energy. Shale gas will become one of the three energy resources in the next 20 years. Read More >
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