Chinese stocks jumped in Asia on Tuesday as global economic worries subdued. The Shanghai Composite Index <.SSEC> advanced 64.60points or 2.1% to 3,145.16, setting a new record for 2009. Investors confidence improved following strong earnings from Haitong Securitites Co. and Shanxi Guoyang New Energy.
Trading in Hong Kong gained momentum following strong American market sentiment. With global recession receding, Chinese stocks are undervalued in Hong Kong compared to Shanghai. The broad Hang Seng Index <.HSI> rose 631.1 points, its sixth best gain in 2009. The index closed 17,885.73 with only three stocks declining of the forty two member index. Ping An Insurance (2318.HK) advanced both in HK and Shanghai following strong premium growth and improved investment income tied to the performance of the Shanghai Composite. But China Life (601628.SS) (LFC) (2628.HK), the other large life insurer, advanced only half of Ping An's and is expected to under-perform in the short run.
Chinese stocks listed in New York are undervalued and lack momentum, setting a tone for a strong rally for the rest of the week. Sinopec (SNP), CNOOC Ltd. (0883.HK) (CEO) and China Telecom (CHA) (0728.HK) look to do well ahead the bell on Tuesday.