September 30, 2010 (Chinavestor) Chinese stocks were mixed in Asia on the last day of September. Shanghai listed A-shares enjoyed a universal rally sending the Shanghai Composite Index (SHA:000001) up 45.0 points or 1.7 percent, the most since August 16. Stock that advanced outnumbered those that fell ten to one in the Mainland, but investors remained cautious in Hong Kong sending the Hang Seng Index (INDEXHANGSENG:.HSI) 20.5 points or 0.1 percent lower for the day.
Shares of Aluminum Corp. of China (NYSE:ACH) (HKG:2600) fell the most among components of the 42 member Hang Seng Index (INDEXHANGSENG:.HSI). China's largest maker of the metal fell after two days of breakneck growth following news of a $1.5 billion investment in a rare earth company. China Life Insurance (HKG:2628) (NYSE:LFC), the largest Chinese life insurer, fell 1.3 percent followed by China Southern Airline (HKG:1055) (NYSE:ZNH), the largest Chinese carrier by fleet size. But China Eastern Airlines (HKG:0670) (NYSE:CEA) and Air China (HKG:0753), the country's flagship carrier, advanced 2.6 percent and 2.7 percent, respectively. Both airliners fell hard in the past two days while China Southern (NYSE:ZNH) advanced, prompting the correction for Thursday. Zijin Mining (HKG:2899), the largest Chinese gold miner, continued to advance as price of gold hit new records.
Investors turned bullish in Shanghai after details of the government property curb policies made public. The removing of the uncertain factor helped real estate stocks to led a wide rally, suggesting most of the bad news have already been incorporated their low price. The Shanghai Composite index (SHA:000001) advanced 45.0 points or 1.7 percent to 2,655.66, registering its first quarterly gain for the year. The exchange will be closed from tomorrow till October 7 observing a National Day Holiday. Aluminum Corp. of China (SHA:601600) was among the few that fell. But China Poly Real Estate (SHA:600048), the largest Shanghai listed property developer, jumped 8.9 percent followed by China Vanke (SHE:200002), the largest Shenzhen listed builder. Zijin Mining (SHA:601899) jumped 8.8 percent before the long holiday break.
Index futures point to a lower open for U.S .equities and thus for Chinese ADRs. If components of the Hang Seng Index (INDEXHANGSENG:.HSI) can serve as a proxy for ADR trading, outlook is good for China Eastern Airlines (NYSE:CEA) but Aluminum Corp. of China (NYSE:ACH) and China Southern Airlines (NYSE:ZNH) is in a tight spot. China Life Insurance (NYSE:LFC) is another stock with possible downside for Thursday.
Overbought Yanzhou Coal (HKG:1171) (NYSE:YZC) continued to advance in Hong Kong, albeit at a much slower pace. The stock might be able to gain some in New York but downside risk exceeds upside potential.