December 21, 2010 (Chinavestor) Chinese shares bounced back up in Asia on Tuesday as tension on the Korean peninsula eased. The Shanghai Composite Index (SHA:000001) rose 51.2 points or 1.8% while the Hang Seng Index (INDEXHANGSENG:.HSI) advanced 354.8 points or 1.5%. Investors picked up undervalued real estate and energy firms in Shanghai and metal and coal firms in Hong Kong.
Poly Real Estate (SHA:600048), the largest property developer among components of the Shanghai Composite Index (SHA:000001) advanced 10%, the daily maximum. China Shenhua Energy (SHA:601088), the largest Chinese coal miner, rose 6.0% in Shanghai as investors bet on rising coal demand for the winter.
Coal miners did well in Hong Kong. Hang Seng Index (INDEXHANGSENG:.HSI) component China Shenhua Energy (HKG:1088) rose 3.7% while Yanzhou Coal (HKG:1171), the third largest coal miner in China, rose 3.2%. Investors see rising demand for coal as a cold gripped the norther parts of China.
Outlook remained bright for Chinese telecoms by looking at components of key ETF in Asia this morning. All but two components of the 25 member iShares FTSE/Xinhua 25 China Index (NYSE:FXI) rose in Asia led by China Shenhua Energy (HKG:1088).
If components of the Hang Seng Index (INDEXHANGSENG:.HSI) can serve as proxy for Chinese ADR trading, outlook is best for Yanzhou Coal Mining (NYSE:YZC) and CNOOC Ltd. (NYSE:CEO) from the energy sector. But airliners, China Eastern Airlines (NYSE:CEA) and China Southern Airlines (NYSE:ZNH) bounce back up as well, suggesting a positive open for the sector as well.