(Oct. 20, 2009 - Chinavestor) With a strong market day on it back, positive market days in Asia early morning, upbeat earnings and index futures pointing to a higher open, China stocks are set to do well on Tuesday morning.
The Shanghai Composite index advanced 48.18 points or 1.52% to 3,084.45 on strong economic growth in China. GDP is said to expanded by 7% in the first nine months of the year and is accelerating, placing the targeted 8% growth for the whole year within reach.
Trading in Hong Kong reflected strong American market sentiment. The Hang Seng Index continued to climb adding 184.5 points or 0.83% to 22,384.96 by the close. All three major Chinese carriers reported September subscriber numbers, showering investors with data to digest. Shares of China Telecom (HKG:0728) (NYSE:CHA) advanced 0.5% while shares of China Mobile (NYSE:CHL) (HKG:0941) and China Unicom (NYSE:CH) (HKG:0762) fell -0.7% and -0.9%, respectively. Most Hong Kong - NYSE cross-listed blue chips fell except for Guangshen Rail (NYSE:GSH) (HKG:0525), Huaneng Power (NYSE:HNP) (HKG:0902), Aluminum Corp. of China (NYSE:ACH) (HKG:2600) and China Life Insurance NYSE:LFC) (HKG:2628).
When it comes to American listed China stocks it is all about earnings, no one is paying attention to the weak reading of the housing market index. Apple beat estimates after the close, just as did DuPont's and United Health's. Index futures point to a higher open, setting a stage for another strong day for momentum China stocks. See Chinavestor's overbought/oversold report this morning for stock specific reading of China ADRs.
When it comes to Chinese indices and ETFs compared to their American counterpart, the DJIA is the most overbought - but its strength is fundamental driven and thus is sustainable at least for the short term. The FXI and other China ETFs are in sync with the Hang Seng Index and have upside left, stemming from a possible strong market day.