March 30, 2010 (Chinavestor) Shares of Chinese companies advanced in Shanghai and Hong Kong following improved European consumer confidence and news that U.S. consumer spending increased for the fifth straight month. The Shanghai Composite Index (SHA:000001) took a breather after two days of broad rallies, ending the day +4.64 points or +0.1% higher at 3,128.47 at the close. The advance in Hong Kong was more persuasive, the Hang Seng Index (INDEXHANGSENG:.HSI) rose +137.4 points or +0.6% to 21,374.79. Airliners were explosive in Hong Kong, shares of Air China (HKG:0753) advanced +4.4% followed by China Southern Airlines (HKG:1055) (NYSE:ZNH) and China Eastern Airlines (HKG:0670) (NYSE:CEA). Aluminum Corp. of China (HKG:2600) rose +2.7% following news that the company is going to return to profitability in the fist quarter of 2010. Shares of Yanzhou Coal (HKG:1171) (NYSE:YZC) advanced as energy prices, oil and coal, reached new 3 months high.
Chinese stocks listed in American exchanges have recovered some of their momentum on Monday. The loss of short term momentum is evident by the large number of Chinese ADRs trading below 20-DMA and 50-DMA. But the low number of Chinese ADRs trading at extremes - overbought or oversold - suggests Chinese stocks are ready to participate in a U.S. equities led rally.
Despite a sizable advances in the past few days, the performance of the Hang Seng Index (INDEXHANGSENG:.HSI) and the Shanghai Composite Index (SHA:000001) remains lackluster compared to their U.S. counterparts.