January 3, 2011 (Chinavestor) The Hang Seng Index (INDEXHANGSENG:.HSI) kicked off 2011 with a healthy 400 points jump on Monday as investors embraced the new year. The rally was universal, stocks that advanced outnumbered those that fell six to one among 42 members of the Hang Seng Index (INDEXHANGSENG:.HSI). The Shanghai Composite Index (SHA:000001) was closed for the day.
Energy and resource and airline stocks led the rally. China's only NYSE listed coal miner, Yanzhou Coal Mining Co. (NYSE:YZC) advanced 3.4% followed closely by CNOOC Ltd. (NYSE:CEO) and China's largest oil producer, Petrochina Co. Ltd. (NYSE:PTR). China Eastern Airlines (NYSE:CEA) and China Southern Airlines (NYSE:ZNH) jumped in Hong Kong as value investors picked up oversold stocks of the sector. Aluminum Corp. of China (NYSE:ACH), an iconic resource stock from China on the NYSE, rose 2.8% in Hong Kong earlier the day. Outlook for large caps is buoyed by the strong performance of components of the iShares FTSE/Xinhua 25 China Index (NYSE:FXI), the most liquid Chinese ETF.
Outlook for Chinese ETFs improved before the opening bell on the NBYS today. All but one component of the 25 member iShares FTSE/Xinhua 25 China Index (NYSE:FXI) rose in Hong Kong, suggesting the large cap proxy is going to go gangbusters on the first day of the year. The rally was less universal among small caps - but stocks that advanced outnumbered those that fell three to one among the 160 plus components of the Guggenheim Small Cap China Fund (NYSE:HAO) as well.
If components of the Hang Seng Index (INDEXHANGSAENG:.HSI) and the iShares FTSE/Xinhua 25 China Index (NYSE:FXI) can serve as proxy for China ADR trading, outlook is best for Yaznhou Coal Mining Co. Ltd. (NYSE:YZC) and CNOOC Ltd. (NYSE:CEO) ahead the opening bell on Monday. China Eastern Airlines (NYSE:CEA) and China Southern Airlines (NYSE:ZNH) are expected to gap up on the NYSE as well while Aluminum Corp. of China (NYSE:ACH) and China Life Insurance (NYSE:LFC) will open up with a positive bias as well.