Commodity Companies on Chinese Stock Market Under Pressure Due to Power Shortage

On the Chinese stock exchanges, commodities companies, in particular, had a hard time as many provinces in the country struggled with supplying power to factories and households.

Experts say power shortages are the next major crisis to hit China after the economic shock caused by financially plagued real estate developer Evergrande. Inner Mongolia BaoTou Steel Union and China Northern Rare Earth Group High-Tech were among the index’s biggest fallers, losing nearly 10 percent. The index in Shanghai was 0.8 percent lower.

Liqueur makers in China were also among the winners. This comes after the chairman of liqueur producer Kweichow Moutai promises about long-term reforms that will increase profits. Moutai climbed almost 9 percent. Industry colleague Luzhou Laojiao advanced 10 percent, and other alcohol producers were also among the winners.

In the Hang Seng index in Hong Kong, which was 0.4 percent higher in the meantime, companies linked to cryptocurrencies, in particular, had a hard time. This happened after China announced, among other things, that it would ban transactions in digital currencies. As a result, Huobi Technology, which started out as one of the world’s largest bitcoin exchanges about seven years ago, plunged 20 percent.

Shares of Evergrande, which are still struggling with huge debts and payment deadlines, in turn, gained almost 3 percent. According to experts, Evergrande could raise at least 600 million dollars in a short time with the sale of its profitable life insurance business.

Financial fund HSBC was among the risers in Hong Kong with a gain of 2.1 percent. Canada’s release of Huawei chief executive Meng Wanzhou raised hopes that the tense relationship between China and the United States could improve somewhat.

Japan’s Nikkei index closed nearly flat at 30,254.57 points. Investors in Japan are hoping for further stimulus once the new prime minister is elected. The elections are later this week.