(Sept. 23, 2009 - Chinavestor) Shares of Chinese companies fell in Hong Kong and in Shanghai simultaneously on Wednesday as investors are looking for direction at both markets. The Hang Seng index shed 105.62 points or 0.49% to 21,596 at the close. Banks weighted on the index but another index heavy weight China Mobile (HKG:0941) continued to advance. Most NYSE cross-listed blue chips advanced in Hong kong, including Aluminum corp. of China (HKG:2600)(NYSE:ACH) and China Petroleum & Chemical Crop. (HKG:0386), known as Sinopec (NYSE:SNP).
Index futures point to a higher open for American indices ahead of the FED meeting. This in turn is expected to lift Chinese ADRs, making a case for momentum stocks to extend their rally. Stocks of interest are CAST, TSL, EDU, CNTF, KONG, ACH, SNP, PTR, CYOU, SNDA and NTES. For a detailed stock level analysis please visit today's overbought / oversold report: "China stocks driven by momentum, IPO".
Looking at indices andf thier trailing ETFs, the fall of the Shanghai Composite is well captured. Less know but important development is that the Morgan Stanley China ETF (NYSE:CAF) is above the Shanghai Composite, implying downside risk for CAF today. But there is upside left for the Hong Kong related ETFs, namely the iShares Xinhua 25 index (NYSE:FXI), The PowerShares Golden Dragon (NYSE:PGJ) and the Claymore/AlphaShares China Small Cap ETF (NYSE:HAO). The Claymore Alphashares China Real Est. (NYSE:TAO) looks undervalued at the moment, something momentum investors should pay attention to!