March 5, 2010 (Chinavestor) Shares of Chinese companies recovered on Friday following steep losses on Thursday. The Hang Seng Index bounced back up +212.19 points or +1.03% to 20,797.97 at the close. The rally was universal, stocks that advanced outnumbered those that fell five to one. Chinese hipping and export related stocks pulled the index. Shares of China Cosco (HKG:1919), the world's largest container shipping line, advanced +4.4% followed closely by rival China Shipping Development (HKG:1138). Shares of China Eastern Airline, the second largest carrier in China, (HKG:0670) (NYSE:CEA) rose +3.7% breaking a four day losing streak. But China Life Insurance (HKG:2628) (NYSE:LFC) continued to suffer and telecommunications equipment maker ZTE Corp. (HKG:0763) fell -3.5% on Friday.
Shares of Chinese companies traded sideways in Shanghai sending the broad Shanghai Composite index +7.69 points or +0.25% higher for the day. The index lost -28.11 points or -0.92% for the week as fears of credit tightening prompted a broad sell-off on Thursday. Construction materials and metal stocks did well for the week; Jiangxi Copper (SHA:600362) advanced 2.5% followed by China's largest steel maker, Baoshan Iron & Steel (SHA:600019). But it was electricity producer Shanghai Electric (SHA:601727) that advanced +10.6% for the week in anticipation that the government will raise prices.
The strength of large cap Shanghai Electric might help explain the exuberance around NASDAQ listed Harbin Electric (NASDAQ:HRBN). Harbin became the most overbought China play by Friday - see today's overbought/oversold report. Weakness of ZTE Corp. (HKG:0763) explains the sell-off of Spreadtrum Communications (NASDAQ:SPRD) despite strong earnings - telecom equipment makers are out of favor. 51job Inc. (NASDAQ:JOBS), Solarfun Holdings (NASDAQ:SOLF) and Giant Interactive (NYSE:GA) are on the menu for today when it comes to earnings.
Property developers fell the most in China during the week. Poly Real Estate (SHA:600048) fell -4.0%, as investors fear credit tightening will dry up funds for the sector. But the global shipping ETF is expected to shine as investors snapped up shares of the largest Chinese shipping companies - China Cosco (HKG:1919) and China Shipping Development (HKG:1138).