August 31, 2010 (Chinavestor) Chinese shares plunged in Asia following a 140 points drop of the DJIA a day before. Investors became defensive ahead of key jobs data of the world largest economy) released later this week. The Hang Seng Index (INDEXHANGSENG:.HSI) tumbled 200.7 points or 1.0 percent to 20,536.49 while the Shanghai Composite Index (SHA:000001) fell 13.9 points or 0.5 percent. The best performing stocks of Monday reversed course; China Shenhua (HKG:1088) gave back 1.2 percent from a gain of 1.7 percent the day before while Yanzhou Coal (HKG:1171) (NYSE:YZC) fell 2.4 percent after a 2.3 percent gain on Monday. China Eastern Airlines (HKG:0670) (NYSE:CEA) tumbled 2.4 percent erasing all the gains from Monday. Lower coal prices helped Huaneng Power (HKG:0902) (NYSE:HNP), the largest Chinese independent power producer, to advance while value investors snapped up shares of China Southern Airlines (HKG:1055) (NYSE:ZNH).
Defensive players ruled the market in Shanghai as well. Zijin Mining (SHA:601899), the largest Chinese gold miner, advanced 1.1 percent as investors sought safety in the precious metal. Worries that economic slowdown will hurt demand for coal sent China Shenhua (SHA:601088), the largest Chinese coal miner, down 1.8 percent. Insurers were mixed; China Pacific Insurance (SHA:601601) fell 2.9 percent but rival Ping An Insurance (SHA:601318) advanced 0.6 percent. Industry leader China Life Insurance (SHA:601628) fell 1.28 percent.
If Hong Kong trading can serve as a proxy for Chinese ADRs, Huaneng Power (NYSE:HNP) and China Southern Airlines (NYSE:ZNH) might be able to beat the market on Tuesday but outlook is dim for Yanzhou Coal (NYSE:YZC), China Eastern Airlines (NYSE:CEA) and China Mobile (NYSE:CHL). China Life Insurance (NYSE:LFC) is oversold and might bottom out.