April 13, 2011 (Chinavestor) Shares of Chinese companies bounced back in both key Asian markets on Wednesday. The Shanghai Composite Index (SHA:000001) advanced 28.6 points or 0.9% while the Hang Seng Index (INDEXHANGSENG:.HSI) rose 158.7 points or 0.7%.
Chinese airliners continued to surge in Hong Kong as price of oil fell to under $106/barrel from $112/barrel last week. H-shares of China Southern Airlines (NYSE:ZNH), China Eastern Airlines (NYSE:CEA) and Air China (HKG:0753) pulled the Hang Seng Index (INDEXHANGSENG:.HSI) higher for the day. But Aluminum Corp. of China (HKG:2600) (NYSE:ACH), the largest aluminum maker in China, fell as its U.S. rival Alcoa (NYSE:AA) missed 2011 Q1 sales expectations.
Aluminum Corp. of China (SHA:601600) weighted on the Shanghai Composite Index (SHA:000001) as well, shedding 1.0% in Shanghai. SAIC Motor (SHA:600104), the largest Chinese auto maker, fell the most among the 50 largest Shanghai listed stocks as March auto sales slowed. But financials and insurance firms made up for the weakness in the commodities and energy sectors.
Chinese ETFs and ADRs followed the DJIA lower yesterday but outlook has changed. The focus is on the U.S. economy and corporate earnings, indicators so far pointing to a higher open for U.S. markets.
China Eastern Airlines (NYSE:CEA) and China Southern Airlines (NYSE:ZNH) were among the best performing Chinese ADRs on Tuesday as price of aviation fuel fell. Goldman warned investors that oil is ready to a substantial pullback in the near future, helping ease oil prices.
If the Hang Seng Index (INDEXHANGSENG:.HSI) can serve as proxy for ADR trading, outlook remains solid for Chinese airliners and upstream oil companies, but Aluminum Corp. of China (NYSE:ACH) is expected to gap down at the open.