August 25, 2010 (Chinavestor) Shares of Chinese companies tumbled in Shanghai but pared somewhat better in Hong Kong, following weak U.S. housing stats the day before. Slower Japanese export growth combined with a plunge in U.S. home sales sent chills through spines of investors globally, fearing a double dip or at least a slow, gradual recovery as the most likely scenario for the rest of the year. The Shanghai Composite Index (SHA:000001) tumbled 53.7 points or 2.1 percent, the most in two weeks, while the Hang Seng Index (INDEXHANGSENG:.HSI) shed 23.7 points or 0.1 percent following a 1.1 percent drop the day before.The sell-off was universal in Shanghai, stock that fell outnumbered those that advanced twenty five to one.
Among the components of the Hang Seng Index (INDEXHANGSENG:.HSI), PCCW (HKG:0008) fell the hardest by shedding another 4.6 percent after a 9.8 percent plunge the day before, as the company is trying to tap equity markets to shore up its balance sheet. Aluminum Corp. of China (HKG:2600) (NYSE:ACH) and Huaneng Power (NYSE:HNP) (HKG:0902) fell 1.8 percent and 1.5 percent, respectively. But HKEx-NYSE cross listed China Unicom (NYSE:CHU) (HKG:0762) and CNOOC Ltd. (NYSE:CEO) (HKG:0883) advanced 1.0 percent and 0.6 percent respectively, trimming some of the losses from the day before. Index heavy weight HSBC Plc. (NYSE:HBC) (HKG:0005) rose 0.6 percent while China Eastern Airlines (NYSE:CEA) (HKG:0670) advanced 0.5 percent.
The broad sell-off in Shanghai effected every sector, hurting real estate, shipping and construction sectors the most. China Vanke (SHE:200002), the largest listed Chinese property developer, tumbled 1.46 percent. Poly Real Estate (SHA:600048), the largest Shanghai listed property developer, tumbled 3.6 percent. China Cosco Holdings (SHA:601919), the largest bulk shipper in the world, dived 3.9 percent. Wuhan Iron & Steel (SHA:600005) shed 3.5 percent followed by Baoshan Iron & Steel (SHA:600019), the largest Chinese steel maker.
If Hong Kong can serve as a proxy for NYSE listed Chinese ADRs, outlook is dimmest for Aluminum Corp. of China (NYSE:ACH) and for Huaneng Power International (NYSE:HNP), but CNOOC Ltd. (NYSE:CEO) and China Unicom (NYSE:CHU) may outperform the broad market.