March 7, 2011 (Chinavestor) Chinese stocks fell in Hong Kong but advanced in Shanghai on Monday. The Hang Seng Index (INDEXHANGSENG:.HSI) fell 95.7 points or 0.4% but the Shanghai Composite Index (SHA:000001) surged 54.7 points or 1.8%. High oil price hurt global market sentiment but Mainland investors were buoyed by the content of the latest economic plan. The next five year plan calls for an increase in domestic consumption, something that Chinese investors wanted to hear. The advance in Shanghai was universal. Stocks that advanced outnumbered those that fell twenty five to one among the 50 largest components of the Shanghai Composite Index (SHA:000001). Coal stocks advanced the most among components of the Shanghai Composite Index (SHA:000001). China Coal Energy (SHA:601898) and China Shenhua Energy (SHA:601088), the two largest coal producers in China, rose the 10% daily limit. Jiangxi Copper (SHA:600362), the largest producer of the metal, surged 6.6% as construction is expected to rise following the news.
Coal stocks did well in Hong Kong as well. Price of coal is tied to oil in China and the $106/barrel oil price is clearly benefiting coal miners. China Shenhua Energy (HKG:1088), the largest Chinese coal miner, advanced 3.2%, the most among components of the Hang Seng Index (INDEXHANGSENG:.HSI). Yanzhou Coal Mining (HKG:1171) (NYSE:YZC), the only NYSE cross-listed coal miner, advanced 1.9%.
Looking at components of key Chinese ETFs in Asia this morning, the picture is mixed. Most large cap stocks fell among components of the Xinhua 25 China Index. This bodes ill for the iShares FTSE/Xinhua 25 China Index (NYSE:FXI) before the open. But the sell-off was far from universal among small caps in Hong Kong as components of the Guggenheim Small Cap China ETF (NYSE:HAO) testify.
High oil price is hurting market sentiment before the opening bell on Monday. Home Inns & Hotels Management (NASDAQ:HMIN) and Perfect World (NASDAQ:PWRD) are among stocks that are going to release earnings after the closing bell on Monday. Energy, solar and airliners are going to be effected the most by oil prices.