Chinese shares surge 4.75 percent after fuel price hike

Chinese share prices surged 4.75 percent by midday Friday as oil and utilities stocks rose sharply after a sudden government fuel price hike, dealers said.

The benchmark Shanghai Composite Index, which covers A and B shares, was up 130.66 points to 2,879.54 after a see-saw morning session with big swings.

China raised petrol and diesel prices by more than 16 percent from Friday to reduce the gap with soaring international oil costs.

"Shares turned higher because both Sinopec and PetroChina are heavily weighted in the market," said Wang Xiaoli, an analyst at Orient Securities.

"The price hike will have positive impacts on earnings prospects of oil majors as well as the broad market, with limited impact on inflation," he added.

Sinopec, Asia's top refiner, jumped 4.53 percent to 13.14 yuan. PetroChina, the biggest index component, was up 5.14 percent to 15.95.

The Shanghai A-share index added 137.10 points, or 4.75 percent, to 3,020.99, while the Shenzhen A-share index gained 34.38 points, or 4.21 percent, to 851.45.

(Agencies)