October 12, 2010 (Chinavestor) The Shanghai Composite Index (SHA:000001) extended its rally on Tuesday and is now up 20% since its lows in July 5, officially entering a bull market. But investors in Hong Kong remained cautious as investors weight the chances of more easing from the FED. The Hang Seng Index (INDEXHANGSENG:.HSI) fell 85.6 points or 0.4 percent to 23,121.70.
Looking at NYSE-HKex cross listed blue chips, large cap Petrochina Co. Ltd. (NYSE:PTR) (HKG:0857) managed to eke out a small 1.1 percent gain while China Petroleum & Chemical Corp. (NYSE:SNP) (HKG:0386), Asia's largest refiner, jumped 3.1 percent as refining margins improved. Aluminum Corp. of China (NYSE:ACH) (HKG:2600), the third largest aluminum maker in the world, rose 2.3 percent as commodity prices stayed firm. But oil producer CNOOC Ltd. (NYSE:CEO) (HKG:0883) fell 3.7 percent making it the worst performer among the 42 member Hang Seng Index (INDEXHANGSENG:.HSI)
components. Yaznhou Coal Mining (NYSE:YZC) (HKG:1171), China's third largest coal miner, fell 1.4 percent as energy prices fell. Index heavy weight Chain Mobile (NYSE:CHL) (HKG:0941), the largest mobile carrier in the world, shed 1.1 percent.
Trading was different on the Mainland where commodity and mining stocks extended their rally. Zijin Mining Co. (SHA:601899), the largest Chinese gold minder, rose to a maximum 10% just like SAIC Motor (SHA:600104) did. Record gold futures helped Zijin while SAIC pre-annoiunced record earnings for the current quarter. Commodity plays shined; Aluminum Corp. of China (NYSE:ACH) (SHA:601600) jumped 5.3 percent while Jiangxi Copper (SHA:600362), the largest producer of the metal in China, surged 6.1 percent.
If components of the Hang Seng Index (INDEXHANGSENG:.HSI) can serve as a proxy for Chinese ADR trading, outlook remains solid for Aluminum Corp. of China (NYSE:ACH) and for integrated oil companies such as China Petroleum & Chemical Corp. (NYSE:SNP) and Petrochina Co. Ltd. (NYSE:PTR). But pure oil producer CNOOC Ltd. (NYSE:CEO) is in trouble just as overbought Yanzhou Coal Mining Co. (NYSE:YZC). Large cap China Mobile (NYSE:CHL) is starting the day with a negative bias as well.