April 14, 2010 (Chinavestor) Chinese markets were cautiously optimistic on Wednesday ahead of more earnings from the U.S. The Hang Seng Index (INDEXHANGSENG:.HSI), just like the Shanghai Composite Index (SHA:000001), opened low but ended the day higher on Wednesday. Resource plays pulled up indices but airliners, financial institutions and energy stocks weighted on the market. Property prices rose +11.7% in March, the most in 2010, spurring speculation that China will have to dislodge the Yuan-dollar peg and let interest rates rise to prevent asset bubbles to form.
Resource plays shined in the mainland, Zijin Mining (SHA:601899), the largest Chinese gold miner, rose +2.9% followed by Jaingxi Copper (SHA:600362) with a 2.6% advance. Shares of Aluminum Corp. of China (SHA:601600) (NYSE:ACH) rose +1.4% in Shanghai. But large cap ICBC (SHA:601398), the largest financial institution in the world, fell -0.8% just as did Petrochina Co. Ltd. (SHA:601857) (NYSE:PTR).
Chinese airliners fell the most in Hong Kong on Wednesday. China Eastern Airlines (HKG:0670) (NYSE:CEA) dived -3.8% while China Southern Airlines (HKG:1055) (NYSE:ZNH) fell -3.4%. Air China (HKG:0753), the Beijing based carrier, shed -2.4%.
Index futures point to a higher open ahead of the Bell on Wednesday. Strong earnings from Intel (NASDAQ:INTC) lift the tech sector while DJIA components are upbeat following strong earnings from JP Morgan & Chase (NYSE:JPM). Chinese ADRs have been losing some of their shine lately according to technical indicators. The number of Chinese ADRs trading above their 20-DMA and 50-DMA reached a plateau, or might be considered as taking a break. Nevertheless today may be another potentially strong market day for Chinese stocks.
The Morgan Stanley China A Share Fund, Inc. (NYSE:CAF) will have to catch up with the Shanghai Composite Index (SHA:000001), suggesting a surge lay ahead for the CAF. Treasuries fell while the oil is mostly unchanged, according to the following chart. The Claymore/Delta Global Shipping ETF (NYSE:SEA) has caught up with the rest of the market, any extension of the rally from here is uncertain.