May 11, 2011 (Chinavestor) Chinese stocks fell in Asia following news that inflation held above 5% in April and government efforts to reign in lending has failed. Investors fear that additional monetary tightening is about to come, hurting corporate growth going forward. The Hang Seng Index (INDEXHANGSENG:.HSI) fell 44.2 points or 0.2% in line with the Shanghai Composite Index (SHA:000001). NYSE cross-listed Guangshen Railways (NYSE:GSH) continue to shine as investors bet on government policies, favoring the company for the next three years. High oil prices hurt airliners but helped energy stocks in Hong Kong.
Chinese railway, telecoms and energy stocks led components of the Xinhua 25 China Index on Wednesday. This bodes well for the iShares FTSE/Xinhua 25 China ETF (NYSE:FXI), the most liquid Chinese ETF. Small cap proxy Guggenheim Small Cap China EETF (NYSE:HAO) is looking good ahead the opening bell on Wednesday for most of its components advanced in Asia earlier today.
Earnings lifted Mindray Medical (NYSE:MR) on Tuesday while Longtop Financial Tech (NYSE:LFT) bounced back as the company fights allegations. IF components of the Hang Seng Index (INDEXHANGSENG:.HSI) can serve as proxy for ADR trading, outlook is best for Yanzhou Coal (NYSE:YZC) and CNOOC Ltd. (NYSE:CEO), but airliners and Chalco (NYSE:ACH) are expected to fall.