Dec. 17, 2009 (Chinavestor) China stocks continued to slide in Asia after the FED's decision to leave interest rates at record lows for many more months to come. The Shanghai Composite Index fell -76.14 points or -2.34% following concerns that large number of IPOs before the end of the year will suck up liquidity. Investors in Shanghai have started to rotate profits out of the best performing stocks to build up liquidity for the upcoming IPOs.
The Hang Seng Index in Hong Kong shed -264.11 points or -2.11% after the central bank of HK warned of possible asset bubbles in the city. Property developers fell hard followed by construction materials. Maanshan Iron (HKG:0323) fell 3.6% while Angang Steel (HKG:0347) dived -4.7%. H-shares of Yanzhou Coal (HKG:1171) (NYSE:YZC) shed -3.7%. But CNOOC ltd. (HKG:0883) (NYSE:CEO) advanced 0.5% despite negative market sentiment. Stocks that fell outnumbered those that advanced 10:1 out of the 44 member Hang Seng Index.
Index futures point to a lower open ahead the bell. Expect overbought China ADRs to experience a correction on Thursday.
The Chinese real estate ETF (NYSE:TAO) has been falling hard and the Samll Cap China ETF (NYSE:HAO) is expect to be next. But the Morgan Stanley China ETF (NYSE:CAF) is expected to outperform if not for today but for the upcoming days, because the CAF is trading well below her index, the Shanghai Composite Index.