August 16, 2010 (Chinavestor) Some of the key stocks for today are: Aluminum Corp. of China (NYSE:ACH), China Mobile (NYSE:CHL) and China Life Insurance (NYSE:LFC). These stocks , components of the Hang Seng Index (INDEXHANGSENG:.HSI), outperformed the market in Hong Kong earlier today.
One of the most reported news this morning is that China overtook Japan earlier this year as the second largest economy in the world. This is actually no news for us, we just featured this in the August Newsletter saying that "Despite a slower growth for 2010, China has just surpassed Japan as the second largest economy in the world in July. While the size of China’s GDP was $4.98 trillion in 2009 just below that of Japan’s $5.07 trillion, even a ten percent growth for China means a $5.48 trillion economy by the end of the year compared to Japan’s $5.22 trillion, assuming a 3 percent growth for the island nation. The U.S. boosts still by far the largest economy though its advantage is slipping."
Chinese stock investors were exuberant on the Mainland, snapping up oversold stocks. The Shanghai Composite Index (SHA:000001) advanced 55.0 points or 2.1 percent to 2,661.71. The rally was universal, each and every component of the SSE-50 Index, measuring the performance of the largest listed shares in Shanghai, advanced. China Cosco Holdings (SHA:601919), the largest bulk-shipper of the world, rose to the daily limit of 10 percent on anticipation that demand for iron ore and other commodities will increase. China Shenhua (SHA:601088), the largest Chinese coal miner, advanced 5.4 percent following news that its output reached record in the second quarter of the year.
But investors were eying the U.S. in addition, taming enthusiasm for the day. The Hang Seng Index (INDEXHANGSENG:.HSI) rose 40.5 points or 0.2 percent to 21,112.12. Chinese shipping companies advanced the most, China Cosco (HKG:1919) jumped 3.8 percent just like China Shipping Development (HKG:1138). But airliners gave back most of the gains from last Friday; Air China (HKG:0573) fell 2.9 percent while larger rival China Eastern Airlines (HKG:0670) tumbled 4.2 percent. China Southern Airlines (HKG:1055), the largest carrier by fleet size, rose a mere HK$.03 or 0.8 percent.
Earnings will remain in focus for Chinese ADRs on Monday. There are at least fifteen Chinese companies reporting earning today: see China stock earnings calendar for August 16-20 for details.
If Hong Kong can serve as a proxy for U.S. listed Chinese stock, expect China Eastern Airlines (NYSE:CEA) to fall hard and have an impact on China Southern Airlines (NYSE:ZNH) as well. But outlook is bright for Aluminium Corp. of China (NYSE:ACH), China Life Insurance (NYSE:LFC) and China Mobile (NYSE:CHL) before the bell on Monday.