April 29, 2011 (Chinavestor) Chinese stocks were mixed in Asia on Friday, advancing in Shanghai but continuing the slide in Hong Kong. The Shanghai Composite Index (SHA:000001) broke a five day loosing streak and bounced back up 25.1 points or 0.9%. But investors in Hong Kong remained cautious amid slower U.S. GDP growth. The gauge dropped to 1.8% in the first quarter from 3.1% three months ago as high gasoline prices dented into disposable income of U.S. households.
Stocks with special interest for U.S. investors include Huaneng Power Int. (NYSE:HNP) and China Telecom (NYSE:CHA) for the day for their large swing trade in Hong Kong on Friday. The drop in oil and coal prices helped Chinese power companies the most in Hong Kong. Three out of the five best performing components of the Hang Seng Index (INDEXHANGSENG:.HSI) came from the sector. Huaneng Power Int. (HKG:0902)(NYSE:HNP), the largest independent power producer, gained 2.9%. But China Telecom (HKG:0728)(NYSE:CHA), the largest Chinese fixed line operator, tumbled 3.2%, the most among 42 components of the Hang Seng Index (INDEXHANGSNENG:.HSI) following weak first quarter numbers.
But trading was different in Shanghai where investors went on bargain hunting after five straight days of losses. Most components of the Shanghai Composite Index (SHA:000001) rallied where large caps took the lead. Stocks that advanced outnumbered those that fell five to one among the 50 largest components of the Shanghai Composite Index (SHA:000001). China Cosco (SHA:601919), one of the largest Chinese container shippers, fell in both Shanghai and Hong Kong as the company slipped into a loss. Overcapacity and slower U.S. growth are responsible for pressured shipping rates.
Chinese ETFs fell on Thursday despite a strong market day. The iShares FTSE/Xinhua 25 China Index (NYSE:FXI) gave up 0.8% while small cap poxy Guggenheim China Small Cap ETF (NYSE:HAO) tumbled 1.2%. Most components of the Xinhua 25 Index fell in Asia on Friday, boding ill for the FXI. But outlook is better for small caps for there was no universal decline among small caps in Asia this morning.
Earnings came to a close for the week on Thursday with Baidu.com Inc. (NASDAQ:BIDU) delivering the most bang. But the Chinese internet giant lacked punch and fell slightly. Noah Education Hold. (NYSE:NED) fell 6.9% but ReneSola Ltd. (NYSE:SOL) bounced back up after gaping down.
If components of the Hang Seng Index (INDEXHANGSNEG:.HSI) were proxy for ADR trading, outlook is best for Huaneng Power Int. (NYSE:HNP), but China Telecom (NYSE:CHA) and Yanzhou Coal Mining (NYSE:YZC) are in jeopardy before the opening bell.