September 22, 2010 (Chinavestor) The Hang Seng Index (INDEXHANGSENG:.HSI) surrendered most of its earlier gains on Wednesday as investors mulled data from the U.S. European markets opened lower weighting on the Asian market at the end of the trading day. Weak dollar sent commodity and oil prices higher, hurting equities in Europe. The Shanghai Stock Exchange was closed for the day.
Wednesday was an almost complete reversal of Tuesday; shares of China Unicom (HKG:0762) fell 3.3 percent surrendering all previous gains for the week. Huaneng Power International (HKG:0902) became the best performing component of the 42 member Hang Seng Index (INDEXHANGSENG:.HSI) for the day compared to steep losses for Monday-Tuesday. China Shipping Development (HKG:1138) and China Cosco (HKG:1919) were among the worst five performers of the day compared to strong gains earlier the week.
But China Petroleum & Chemical Corp. (HKG:0386) (NYSE:SNP) and airliners such as China Eastern Airlines (HKG:0670) and China Southern Airlines (HKG:1055) continued to march forward. Large cap China Mobile (HKG:0941) and Petrochina (HKG:0857) advanced along with China Life Insurance (HKG:2628).
But China Unicom (HKG:0762) fell after a Deutsche downgrade while oil producer CNOOC Ltd. (HKG:0883) and coal miner Yanzhou Coal (HKG:1171) continued to lose traction.
Index futures point to a lower open ahead of the Bell on Wednesday. Investors took defensive positions after the FED stepped short of taking immediate action to help boost the economy. But it is sound to say that the market is looking for direction and current weakness may be just temporary. Profit taking may be a theme for the day.
If components of the Hang Seng Index (INDEXHANGSENG:.HSI) can serve as a proxy for Chinese ADR trading, overbought China Petroleum & Chemical Corp. (NYSE:SNP) may hang on to gains while airliners, China Eastern Airlines (NYSE:CEA) and China Southern Airlines (NYSE:ZNH), are likely to extend the rally. Huaneng Power (NYSE:HNP) has the most potential on Wednesaday. China Mobile (NYSE:CHL) may gain but China Unicom (NYSE:CHU) is likely to fall after the Deutsche downgrade. China Life Insurance (NYSE:LFC) is expected to follow overall market sentiment for the day.