April 16, 2010 (Chinavestor) China stocks fell in Asia on Friday sending the Hang Seng Index (INDEXHANGSENG:.HSI) and the Shanghai Composite Index (SHA:000001) into the red for the week. The Hang Seng Index fell -292.6 points or -1.3% while the Shanghai Composite Index (SHA:000001) tumbled -34.66 points or -1.1%. Chinese investors sidelined positive earnings from the U.S. and focused on fiscal tightening measures, steps that the Chinese government is going to take to cool the economy. China's GDP grew 11.9% in the first three months of 2010 and property prices surged 11.7% in March, prompting investors to take defensive measures should the government tighten fiscal policy. Down payment of second homes rose to 50% from 40% while down payment on third or more homes will be raised by a wide margin - suggested the State Council in a statement on Thursday.
Chinese stocks listed in American capital markets are going to trail U.S. markets lower. Index futures suggest a lower opening for U.S. indices before the open on Friday. China Telecom (HKG:0728) (NYSE:CHA) was the worst performing component of the Hang Seng Index (INDEXHANGSENG:.HSI) on Friday and is expected to fall on the NYSe as well. China Mobile (HKG:0941) (NYSE:CHL) fell -2.2% in Hong Kong and is overbought - bears will have the upper hand on Friday. But shares of China Unicom (HKG:0762) (NYSE:CHU) rose +4.4% after a Morgan Stanley upgrade - suggesting NYSE listed shares may outperform the market today.
Goolge Inc. (NASDAQ:GOOG) reported strong earnings yet the stock slipped after market - suggesting Baidu.com (NASDAQ:BIDU) will follow its peer lower on Friday.
Chinese and U.S. indices have been trading in a narrow range lately. Eye catching discrepancy come from the iShares FTSE/Xinhua 25 Index (NYSE:FXI) vs. the Hang Seng Index (INDEXHANGSENG:.HSI), suggesting the ETF will have to follow Hong Kong's benchmark lower.