January 28, 2011 (Chinavestor) China stock investors continued to lift shares in Shanghai, sending the Shanghai Composite Index (SHA:000001) to a new six week high. Investors likes industials and resource plays but the financial sector came under pressure after policy makers raise capital ratios to 14 percent for banks where credit growth gets excessive.
Hong Kong investors paused ahead of U.S. GDP data, making the Hang Seng Index (INDEXHANGSSNG:.HSI) suffering a 162.6 points or 0.7% loss for the day. Despite the sell-off, telecoms continued to outperform the market. H-shares of China Unicom (NYSE:CHU) rose 1.1% followed by China Telecom (NYSE:CHA) and China Mobile (NYSE:CHL). But China's offshore oil specialist, CNOOC ltd. (NYSE:CEO) fell the most among components of the 42 member Hang Seng Index (INDEXHANGSENG:.HSI) after issuing a 2011 production guidance.
Outlook for large cap Chinese ETFs is weak ahead the opening bell on Friday. Most components of the iShares FTSE/Xinhua 25 China Index (NYSE:FXI) ended the day in the red, expect for telecoms. The decline was less universal among small cap stocks as components of the Guggenheim Small Cap China ETF (NYSE:HAO) testify. Stock the fell outnumbered those that advanced two to one among small cap stocks in Asia.
Looking forward, investors are on hold ahead of U.S. GDP data. Corporate earnmings are mixed with a positive bias as Microsoft (NASDAQ:MSFT) and Ford (NYSE:F) reported sound numbers.