6:00AM New York, 6:00 PM Hong Kong - China allocates Rmb19.8 billion fuel subsidies.

Hong Kong stocks fell as the decision by the government to raise electricity and oil prices affected mainland airlines. Commodity stocks and power companies were active after China imposed a price freeze on thermal coal prices.

Market sentiment

In Hong Kong trading Hang Seng Index edged down 0.23% or 52.01 at 22,745.60, rising 0.7% for the week, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, closed down 0.71% or 87.90 at 12,343.54. In Shanghai trading, CSI 300 Index advanced 2.76% or 76.59 at 2,849.67.

Daily turnover on main-board was HK$72.69 billion compared with HK$59.04 billion yesterday.

China hikes petrol energy prices

The Shanghai Daily reported today that the National Development and Reform Commission said on its Web site last night that the prices of gasoline and diesel will gain by 1,000 yuan a ton, while aviation fuel prices will increase by 1,500 yuan a ton.

Prices of natural gas and liquefied petroleum gas will remain unchanged, but retail prices of gasoline and diesel oil will be increased by 16% and 18% to 6,980 yuan and 6,520 yuan a ton correspondingly.

Retail gasoline price is expected to rise 0.8 yuan per liter and 0.92 yuan per liter for diesel oil costs.

Beijing will also increase electricity prices by an average 0.025 yuan a kilowatt-hour on July 1. Temporary caps will be imposed on thermal-coal prices until the end of the year.

Finance ministry allocates Rmb19.8 billion subsidies

Xinhua News Agency reported that the ministry of finance today allocated Rmb19.8 billion in subsidies to groups and sectors that are vulnerable to the recent fuel price increases.

Of the allocation, grain producers will get Rmb7.8 billion and Rmb12 billion will be set allocated for taxis, urban and rural buses, and the fishery and forestry sectors. The finance ministry said provincial governments should forward the subsidies to counties and cities within five days after receiving the funds.

China insurers pay Rmb327 million in May

The China Insurance Regulatory Commission said that insurers have paid Rmb327 million so far in claims arising in the aftermath of the May quake. Life insurance was paid Rmb184 million and property insurance got Rmb143 million. Statistics show that total claims by June 18 topped 249,000.

Gainers & Losers

CNOOC dropped 3.1% as crude oil prices declined 3.5% to $132 per barrel on expectations that demand from China will fall.

Sinopec Corp jumped 1.13% to HK$8.13 as China lifted its lead on the price of petroleum products, while Shanghai Petrochemical surged 3% and PetroChina increased 1.6%.

Huaneng Power declined 2.7% and Datang Power slumped 2.5% after the 4.7% increase in retail electricity prices was deemed insufficient.

Losses were also reported in coal miners as Beijing imposed temporary caps on thermal coal prices up to the end of the year. Yanzhou Coal tumbled 7.5%, China Shenhua Energy shed 4.3% and China Coal Energy plunged 3.8%.