April 5, 2010 (Chinavestor) Markets were closed in Hong Kong and Shanghai on Monday but stocks rose in Asia following a strong U.S. jobs report. Besides China, stock markets were closed in Australia, New Zealand, and Taiwan. Trading will resume on Wednesday in Hong Kong and Tuesday in Shanghai. Optimism is not limited to the U.S. Chinese manufacturing data was robust while the Tankan survey suggested investor sentiment is improving in Japan is as well.
Chinese resource and mining stocks outperformed on Good Friday in Shanghai, the last trading day to reach back to, as demand for metals and raw materials is on the rise. There were three mining giants among the best five stocks last Friday in Shanghai: Jiangxi Copper (SHA:600362), the largest Chinese miner of the metal, Zijin Mining (SHA:601899), the largest Chinese gold miner, and Western Mining (SHA:601168). Looking at NYSE-SSEx cross-listed blue chips in Shanghai, shares of Aluminum Corp. of China (SHA:601600) (NYSE:ACH) advanced +1.4% followed closely by Sinopec (SHA:600028) (NYSE:SNP).
Chinese stocks listed in American exchanges are heading to a strong start on Monday. Index futures point to a higher open, setting a stage for a potentially positive day for Chinese ADRs as well. Large cap liquid stocks are expected to do well along with momentum driven smaller counterparts. Momentum is back for Chinese ADRs as the following indicators testify. The number of Chinese stocks trading above 20-DMA and 50-DMA is on the rise, just as is the number of overbought and oversold China plays. The earnings calendar is light for the week.
Chinese indices have been strong as of last week with Shanghai taking the lead. The Morgan Stanley China A Share Fund, Inc. (NYSE:CAF) advanced +7.04% last week and is approaching theoretical highs - but strong money flows suggest a pullback is not imminent. Global shipping was under pressure on lower cargo fees but have improved significantly last week, as is evidenced by the surge in the Claymore/Delta Global Shipping ETF (NYSE:SEA). Despite a sizable lift more upside is on the way for shipping companies as they lag the rest of the stock universe.