Chinese energy companies from Yanzhou Coal Mining Co. (YZC) to PetroChina Co. fell in New York after rallying in Hong Kong, as slumping oil prices outweighed the Federal Reserve’s decision to maintain monetary stimulus.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. closed little changed at 104.08 yesterday after sliding as much as 0.7 percent. American depositary receipts of PetroChina dropped, widening the discount versus its Hong Kong shares to the most in four weeks. Yanzhou slumped 2.6 percent after rising 2.5 percent in Hong Kong. Web clothing retailer Vipshop Holdings Ltd. (VIPS) rose for a fourth day and E-House China Holdings Ltd. (EJ) jumped to a two-year high.
West Texas Intermediate crude fell for the fourth time in five days as President Bashar al-Assad said Syria will make available information about its chemical weapons, offsetting gains backed by the Federal Reserve’s decision to refrain from reducing its bond purchases. China’s coal price has declined almost 12 percent this year, leading to a decrease of 150 million tons of raw coal output, according to a report by Bloomberg Industries.
“Emerging markets are going to be volatile on a daily basis after the Fed’s not tapering caused quite a big rally,” Sam Mahtani, who oversees about $5 billion as director of emerging markets at F&C Asset Management Plc (FCAM) in London, said by phone yesterday. “Chinese energy companies reflected that the sector isn’t an area that’s been of a huge investor interest globally this year.”
The iShares China Large-Cap ETF (FXI), the largest Chinese exchange-traded fund in the U.S., fell 0.7 percent to $38.88 in New York, dropping the most in a week. The Standard & Poor’s 500 Index (HSCEI) slipped 0.2 percent as investors weighed the latest batch of U.S. economic reports, including sales of previously owned U.S. homes and the Federal Reserve Bank of Philadelphia’s general economic index.
Yanzhou’s ADRs slumped to $10.46, the biggest decline in a week. The ADRs have lost 39 percent this year, after tumbling 44 percent the two previous years.
China’s benchmark price for thermal coal fell over the past week from the prior period to as low as 530 yuan ($87) a metric ton, data from the China Coal Transport and Distribution Association showed Sept. 16.
“The coal sector in China will remain weak in the next several years as rising supply will keep prices low,” Mahtani said.
Beijing-based PetroChina (PTR), the nation’s biggest oil producer, fell 1.1 percent to $113.91. The ADRs, each representing 100 underlying shares in the company, traded 1.1 percent below its Hong Kong stock, the widest discount since Aug. 22.
Cnooc Ltd. (883), China’s largest offshore oil explorer, dropped 0.7 percent to $209.41. WTI futures slipped 1.6 percent on the New York Mercantile Exchange. Oil surged the most in three weeks on Sept. 18 following the Fed’s statement that it won’t reduce its bond buying.
Guangzhou-based Vipshop rallied 5.5 percent to a record $60.12, extending gains into a fourth day. Trading volume was five times the 90-day daily average, data compiled by Bloomberg showed. E-House, a real estate brokerage based in China, climbed 5.3 percent to $10.01, the highest close since May 2011.
The Hang Seng China Enterprises Index jumped 1.7 percent yesterday to 10,769.54, the highest level since May. The markets in mainland China were closed for a holiday.
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