September 27, 2010 (Chinavestor) Shares of Chinese companies jumped in Shanghai reopening after a three-day long holiday last week. The Shanghai Composite Index (SHA:000001) advanced steadily throughout the day, rising 36.4 points or 1.4 percent to 2,627.97. Hong Kong was spurred by strong economic data from the U.S. last Friday; the Hang Seng Index (INDEXHANGSENG:.HSI) jumped 221.4 points or 1.0 percent. The rally was universal; stocks that advanced outnumbered those that fell six to one among the 42 components of the Hang Seng Index (INDEXHANGSENG:.HSI).
Chinese investors got a shot in the arm last Friday when better than expected economic data in the U.S. sent each and every component of the DJIA higher for the day. Hong Kong, much more open to the world than Shanghai, reacted favorably sending airliners, energy, basic material stocks higher for theclosely by Air China (HKG:0753), the country's flagship carrier. But it was China Southern Airline (HKG:1055), the largest of all, that rocked the boat with a stunning 5.7 percent jump. Yanzhou Coal (HKG:1171), the third largest coal miner in China, was the best performing component of the Hang Seng Index (INDEXHANGSENG:.HSI), jumping 6.2 percent. day. China Eastern Airlines (HKG:0670) advanced 4.2 percent followed by China Telecom (HKG:0762) and Aluminum Corp. of China (HKG:2600).
Traders in Shanghai found support in strong industrial profits, sending oversold mining, real estate and metal shares soaring. Jiangxi Copper (SHA:600362), the largest producer of the metal, jumped 5.2 percent while Jinduicheng Molybdenum (SHA:601958), China's largest molybdenum producer, was the best performing component among the 50 largest companies of the Shanghai Composite Index (SHA:000001). Western Mining (SHA:601168) rose 5.9 percent. Poly Real Estate (SHA:600048), the largest Shanghai listed property developer, rose 4.5 percent. Considering that these stocks were the worst performers for the last week, Monday was an overall bullish signal for the markets. More about last week: China ADR Weekly Wrap September 20-24, 2010. But Chinese financial institutions suffered, all five worst components of the SSE-50 index came from the finance and insurance industries.
Index futures point to a moderately higher open on Monday. If components of the Hang Seng Index (INDEXHANGSENG:.HSI) can serve as a proxy for ADR trading, outlook is bright for airliners, Yanzhou Coal (NYSE:YZC) and China Telecom (NYSE:CHA), besides metal stocks like Aluminum Corp. of China (NYSE:ACH). China Southern Airlines (NYSE:ZNH) is looking better than China Eastern Airlines (NYSE:CEA) ahead the opening bell.