Chinese shares traded higher in Shanghai but fell in Hong Kong on Wednesday, setting no tone for China ADRs before the bell. Index futures are mixed ahead of inflation and trade data.
World indices fell on Wednesday but the Shanghai Composite Index <.SSEC> jumped 1.23% to 2,810.12 points, a new high for the index in 2009. Fears that the resumption of IPOs won't suck up all liquidity helped bulls returning to the market. The rally was universal with construction and property stocks taking the lead. Sichuan Road and Bride Co jumped 3.5%, Anhuai Expressway rose 2.32% while automaker Dong Feng Auto advanced 1.9%.
But trading in Hong Kong reflected subdued optimism that the world largest economy will re-bounce quickly. Mixed economic signs sent the Dow Jones Industrial Average (DJI) 107.46 points lower on Tuesday spelling trouble for commodity prices and related stocks. The Hang Seng Index fell 80.9 or 0.45% to 18,084.16 points. Resource players got hurt, Yanzhou Coal (1171.HK: Quote, Profile , Research) (YZC: Quote, Profile , Research) fell 3.7% followed by CNOOC Ltd. (0883.HK: Quote, Profile , Research) (CEO: Quote, Profile , Research) and Sinopec Corp (0386.HK: Quote, Profile , Research)(SNP: Quote, Profile, Research) (600028.SS: Quote, Profile , Research). But power generator Huaneng Power International (0902.HK: Quote, Profile , Research) (600011.SS: Quote, Profile , Research) (HNP: Quote, Profile , Research) managed to stay in the black while rival Huadian Power International Corp Ltd. (1071.HK: Quote, Profile , Research) rose 3.0% on lower coal prices.
Looking at China ADRs from a technical point of view, there has been a dramatic adjustment taking place lately. Right now only one Chinese ADR is technically overbought, a huge drop from eleven just a week a go. Most China stocks fell below their 20-DMA but relative strength index indicates there is more room for correction. But correction depends on American market sentiment, something that is hard to tell when index futures are mixed ahead the bell.