Nov. 2, 2009 (Chinavestor) Manufacturing activity remained strong in China fueling optimism for China's domestic stock exchange. The Shanghai Composite index rose 80.80points or 2.70% and broke through the psychologically important 3,000 level to to 3,076.65 points at the close. Forty nine stocks out of the SSE-50 index advanced, an indication for the strength of the rally. Financials led the rally following reports that Q3 net income rose 16.17% Industrial Bank Co. Ltd. (SHA:601166). Shares of Ping An Insurance rose 6.7% followed by China Life Insurance (SHA:601628) (NYSE:LFC) advance of 2.9%. But large cap Petrochina (SHA:601857) (NYSE:PTR) advanced only 0.9%.
Optimism carried over to Hong Kong to a certain degree. The Hang Seng index opened more then 600 points lower but advanced throughout the day to lose -132.68 points or -0.61% by the close. Index heavy weight HSBC Plc (HKG:0005) weighted down the index following reports that bad debt provisions are above expectations in the United States. China Life Insruance (HKG:2628) (NYSE:LFC) advanced 1.5% but Petrochina (HKG:0857) (NYSE:PTR) fell -1.2% in Hong Kong.
Index futures point to a higher open, suggesting a strong rebound for China stocks. As the following indicator suggests China ADRs are oversold and lost momentum, creating opportunity for the intelligent investor. Expect China Life Insurance (NYSE:LFC) to do well. For stock specific information, please read today's overbought/oversold report.
Chinese indices and ETFs offer trading opportunities as well. As the following indicator suggests, the Morgan Stanley China Fund (NYSE:CAF) has a lot of ground to make up.