Hong Kong's key stock index dips 0.1 percent, traders sell refiners on surging fuel prices

Hong Kong stocks dipped Wednesday as traders sold refiners Sinopec and PetroChina on concerns about surging fuel prices.

The blue-chip Hang Seng Index declined 19 points, or 0.1 percent, to 25,533.49. But the index is still up more than 21 percent since it ended at 21,084 on March 17, its lowest closing level since it peaked in October.

Analysts said Wednesday's decline was led by refiners, whose operating losses will likely widen further despite government subsidies.

Despite soaring global oil prices, Chinese refiners' earnings are declining because the government controls retail gasoline and diesel prices, meaning suppliers must pay rising market prices for crude.

Sinopec fell 2.2 percent to HK$7.49 and PetroChina Ltd. dropped 0.6 percent to HK$10.90. Offshore oil and gas producer CNOOC, on the other hand, rose 3 percent to HK$14.76.

Hong Kong Exchanges, the local bourse operator, dropped 2 percent to HK$151.20 despite reporting a 79 percent rise in first-quarter net profit to HK$1.65 billion (US$212 million; euro137 million) on robust growth in equities and derivatives trading.

Chinese insurers continued to be dragged down by potentially huge claims related to the earthquake in the southwestern province of Sichuan.

China Life, which has the biggest share of Sichuan's life insurance market by premiums of 38.6 percent, fell 0.5 percent to HK$33.05. Ping An dropped 0.6 percent to HK$70.45.

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