March 30, 2011 (Chinavestor) Chinese stocks were mixed in Asia as stocks reallied in Hong Kong but shed in the Mainland. The Shanghai Composite Index (SHA:000001) shed 2.2 points or 0.1% as worries about inflation hurt equity markets. But investors sent the Hang Seng Index (INDEXHANGSENG:.HSI) 391.1 points or 1.7% higher on the back of U.S. markets. The Dow Jones Industrial Average (INDEXDJX:.DJI) rose 81.1 points on Tuesday albeit at very low volume. Large caps took the lead as all but four components of the iShares FTSE/Xinhua 25 China Index (NYSE:FXI) rose for the day.China's largest lender, Industrial and Commercial Bank of China (HKG:1398) rose 1.24% after reporting a 33% jump in net income for 2010 fourth quarter. Yanzhou Coal (HKG:1171), the third largest Chinese coal miner, rose 5.8% as coal prices advanced. China Unicom (HKG:0762), the second largest mobile carrier, succumbed to profit taking and fell the most among 42 members of the Hang Seng Index (INDEXHANGSENG:.HSI).
Most large caps advanced in Hong Kong as components of the iShares FTSE/Xinhua 25 China Index (NYSE:FXI) testify. Energy stocks dominated the index; Petrochina Co. Ltd. (HKG:0857) and CNOOC ltd. (HKG:0338) rose 3.2% and 2.3%, respectively. China Life Insurance (HKG:2628), another index heavy weight, rose 2.3% breaking a long loosing streak. But China Unicom (HKG:0762) fell 3.5% as investors rotated out of the stock into larger China Mobile (HKG:0941).
Index futures point to a higher open after an in-line jobs report. This bodes well for the most liquid Chinese ETF, the iShares FTSE/Xinhua 25 China Index (NYSE:FXI). If components of the Hang Seng Index (INDEXHANGSENG:.HSI) can serve as proxy for ADR trading, outlook is best for Yanzhou Coal Mining (NYSE:YZC), Petrochina Co. Ltd. (NYSE:PTR) and China Life Insurance (NYSE:LFC). But China Unicom (NYSE:CHU) is expected to gap down. The performance of the Shanghai Composite Index (SHA:000001) is less relevant today when U.S. economic news dominate the trading floor.