October 8, 2010 (Chinavestor) Chinese stocks extended their gain in Hong Kong and jumped a record 3.0 percent in Shanghai on Friday, after Mainland markets reopened following a week long National Day Holiday. The Shanghai Composite Index (SHA:000001) steadily advanced 83.1 points or 3.0 percent for the day, recording its second best percentage points gain for the year after May 24, 2010 when the index jumped 3.5 percent. Investors kept their eye on the American monthly jobs report in Hong Kong, helping the Hang Seng Index (INDEXHANGSENG:.HSI) rise a modest 59.9 points or 0.3 percent to 22,944.18.
Zijin Mining Co. (HKG:2899) was the best performing component of the 42 member Hang Seng Index (INDEXHANGSENG:.HSI) thanks to a 12.4 percent rise on Friday. Besides record gold futures, the Government of Fujian is expected to significantly lesser the proposed fine of RMB500 million after a toxic metal waste spill earlier in July. China Southern Airlines (HKG:1055), the largest Chinese carrier, was the best performing HKEX-NYSE cross listed blue chip on Friday advancing 3.5 percent on Friday. China Life Insurance (HKG:2628) rose 1.7 percent followed by Guangshen Rail (HKG:0525). But H-shares of large cap Petrochina Co. Ltd. (NYSE:PTR) and Aluminum Corp. of China (NYSE:ACH) fell in Hong Kong.
Zijin Mining (SHA:601899) and Jiangxi Copper (SHA:600362), China's largest gold and copper miners, respectively, gained the maximum 10 percent after hold futures rose to a record in Shanghai. Metal prices rose as the dollar hit a four months low against the euro lifting commodity, energy and metal prices alike. Chinese coal producers and mining companies followed suit; China Shenhua (SHA:601088), the largest Chinese coal miner, gained 9.3 percent followed by China Coal Energy (SHA:601898). But Chinese financial institutions registered only modest gains as clues about the property market cool off resurfaced. City of Shanghai announced plans to introduce a special property tax, ban second and third mortgages and increased the supply of residential land to help tame property price increases.
Index futures point to a lower open as the monthly jobs report disappoints. The U.S. economy shed 95,000 jobs, more than expected, keeping the unemployment rate at 9.6 percent. This implies Chinese ADRs are going to follow overall market lower. If the Hang Seng Index (INDEXHANGSENG:.HSI) can serve as a proxy, Petrochina Co. Ltd. (NYSE:PTR) and Aluminum Corp. of China (NYSE:ACH) are the most vulnerable NYSE-HKEx listed stocks for the day. China Southern Airlines (NYSE:ZNH) and China Eastern Airlines (NYSE:CEA) may be able to eke out some gains, but that is increasingly unlikely. China Life Insurance (NYSE:LFC) is in jeopardy for the day as well.