March 23, 2011 (Chinavestor) China stocks rose for the fourth day in Shanghai while Hong Kong investors kept a close eye on the U.S. The Shanghai Composite Index (SHA:000001) advanced 29.9 points or 1.0% with most large caps stocks on the rise. The rally was universal, stocks that advanced outnumbered those that fell ten to one.
But investors in Hong Kong remained cautious as oil hit over $105/barrel and air strikes in Libya escalated. The Hang Seng Index (INDEXHANGSENG:.HSI) fell 32.5 points or 0.1%, another small shedding after Tuesday's trading. Oversold airliners continued to gain ground but H-shares of China Life Insurance (HKG:2628) (NYSE:LFC) and China Mobile (NYSE:CHL) continued to loose ground.
China Eastern Airlines (HKG:0670) (NYSE:CEA) was the best performing NYSE cross listed component of the 42 member Hang Seng Index (INDEXHANGSENG:.HSI). China Southern Airlines (HKG:1055), the largest Chinese airliner, surged 7.9% while Air China (HKG:0753), China's flagship carrier, rose 1.7%. Airliners bounced back up following a 20% drop earlier the week.
The Dow Jones Industrial Average (INDEXDJX:.DJI) 17.9 points to just over 12,000, putting pressure on the Hang Seng Index (INDEXHANGSENG:.HSI) for the day. Investors in Hong Kong follow U.S. market sentiment closely as interest rates and the city's currency is quasi pegged to that dollar.
But China Mobile (NYSE:CHL) continues to suffer as subscriber growth slowed. China Telecom (NYSE:CHA) reported 2010 FY numbers yesterday, highlighting the lack of growth the sector is facing.
China Life Insurance (NYSE:LFC), China's largest life insurer, fell as outlook for markekt conditions deteriorated.
Earnings and overall market sentiment is going to drive Chinese ADR on Wednesday. If components of the Hang Seng Index (INDEXHANGSENG:.HSI) can serve as proxy for ADR trading, outlook is best for China Eastern Airlines (NYSE:CEA) and China Southern Airlines (NYSE:ZNH). But index heavy weight China Life Insurance (NYSE:CHL) and China Mobile (NYSE:CHL) are expected to feel a pinch, if Asian trading is used as a guide.