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China shares test 8-week highs led by auto sector, Hong Kong shut
August 14, 2013 / 4:36 AM / 4 years ago

China shares test 8-week highs led by auto sector, Hong Kong shut

* CSI300 +0.2 pct, Shanghai Comp +0.1 pct

* China auto firms aided by reported probe on foreign brands

* Materials sector broadly weaker, limiting index gains

* Typhoon shuts Hong Kong markets for whole day

By Clement Tan

HONG KONG, Aug 14 (Reuters) - China shares tested fresh eight-week highs in relatively robust trade on Wednesday, lifted by a 4.2 percent jump for SAIC Motor after its auto parts unit said it will increase its stake in a joint venture with Visteon.

Shares of larger automakers also rose following a Reuters report that an industry body is helping the National Development and Reform Commission investigate whether foreign carmakers are setting minimum retail prices in China.

“If this is true, it’s definitely a positive for demand for local carmakers. It also sounds consistent with what Beijing has been saying about supporting local brands for the last year or so,” said Guo Yanling, a Shanghai-based analyst with the brokerage Shanghai Securities.

At midday, the CSI300 was 0.2 percent higher, while the Shanghai Composite Index pared early gains and was up 0.1 percent. Both are now hovering at their highest levels since mid-June.

Hong Kong markets were shut in the morning by Typhoon Utor and will stay closed all day, with authorities only looking to downgrade the level 8 warning signal from 0600 GMT.

Gains on Wednesday let SAIC Motor, China’s largest automaker, cut this year’s decline in its share price to 19.3 percent. Its auto parts unit Huayu Automotive surged the maximum 10 percent in Shanghai after its announcement about the joint venture with Visteon Corp.

Great Wall Motor climbed 1.9 percent in Shanghai, while FAW Car Company soared 6.3 percent in Shenzhen.

Hefei Rongshida Sanyo Electric climbed 4.9 percent in Shanghai after Whirlpool Corp’s China unit agreed to buy a 51 percent stake in the Chinese fridge and washing machine maker.

Weakness in the materials sector limited index gains. China’s largest gold miner Zijin Mining slid 1.6 percent in Shanghai after reporting a 54 percent slide in first half net profit from a year earlier.

The recent rally in material counters was further stalled by comments from China’s industry minister, cited in the official Shanghai Securities News, that Beijing will push ahead with efforts to cull excess capacity a year earlier than planned.

China Shenhua Energy Co Ltd shed 0.8 percent after closing on Tuesday at a one-month high. Anhui Conch Cement , which ended Tuesday at a two-month high, also lost 0.8 percent.

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