April 8, 2010 (Chinavestor) Advancing over +4% in the last two weeks, the Hang Seng Index (INDEXHANGSENG:.HSI) was ready to take a break. The same was true for the Shanghai Composite Index (SHA:000001) after advancing +101.87 points or +3.33% from March 25 to April 6. Let's add Greece's difficulty to pay its debt and disappointing consumer credit data from the U.S. for March and the stage is set for a market correction. The Hang Seng Index (INDEXHANGSENG:.HSI) fell -61.7 points or -0.3% to 21,867.04 by the close. stocks that fell outnumbered those that advanced four to one. China Southern Airlines (HKG:1171) (NYSE:ZNH) and China Mobile (HKG:0941) (NYSE:CHL), the world's largest mobile carrier, advanced despite a weak market sentiment. Shares of China Unicom (HKG:0762) (NYSE:CHU) rose +1.2% but investors took profits off long time favorite China Telecom (HKG:0728) (NYSE:CHA). The rally of energy stocks hit a roadblock; CNOOC Ltd. (HKG:0883) (NYSE:CEO) gave back -2.2% while Yanzhou Coal (HKG:1171) (NYSE:YZC) tumbled -2.8%.
Chinese stocks listed in American exchanges look vulnerable ahead of the Bell on Thursday.
Chinese ETFs listed on the NYSE are ahead of Chinese indices in Hong Kong and the Mainland. This in turn suggests a correction is inevitable. The FXI is ahead of the Hang Seng Index (INDEXHANGSENG:.HSI) as the following technical indicator suggests. While the global shipping ETF looks under appreciated, Chinese shipping companies fell in Hong Kong on Thursday, limiting upside for the NYSE:SEA ETF.