Solar stocks dragged down Chinese shares in the US on Tuesday following news that Italy may trim subsidies to the industry, Bloomberg reported. Italy, the world’s second-largest solar market, proposed cutting subsidies by 50% in the first draft of its upcoming energy plan, Citigroup Inc (C.NYSE) analyst Timothy Arcuri wrote wrote in an email. Germany, the world’s largest solar market, is expected to reduce its subsidies by as much as 29% from April 1. Shares of Chinese solar wafer maker LDK (LDK.NYSE) fell 5.4% to US$4.24 on the news, while Trina Solar (TSL.NYSE) lost 2.7% to US$7.44 and Suntech Power Holdings (STP.NYSE) sank 1.6% to a two-week low of US$3.05. “Solar stocks’ trading reacted to the news on the subsidy cut in Italy where solar sales normally offer manufacturers higher margins,” said Chris Kettenmann, an analyst at Miller Tabak & Co in New York, adding that cost cutting by Chinese solar makers would absorb the German and Italian subsidy reductions.