June 16, 2011 (Chinavestor) Chinese stocks dropped sharply in Asia on Thursday following worries about the health of the global economy. U.S. jobs market remains a problem with Greece's turmoil on top of that. All told, the Hang Seng Index (INDEXHANGSENG:.HSI) dived 390.7 points or 1.8% while the Shanghai Composite Index (SHA:000001) dropped 41.0 points or 1.5%. A broad sell-off hit both markets, large and small caps fell in tandem. As a consequence, outlook for the iShares FTSE/Xinhua China 25 index (NYSE:FXI), the most liquid Chinese ETF, is dim.
Had it not been for index heavy weight Industrial and Commercial bank of China (SHA:601398), a stock that didn't end up the day in the red, the Shanghai Composite Index (SHA:000001) would have suffered even more. The same is true for the Hang Seng Index (INDEXHANGSENG:.HSI), for Petrochina (HKG:0857) saved the day for Hong Kong's gauge.
Most large caps fell in Hong Kong, biding ill for the most liquid Chinese ETF, the iShares FTSE/Xinhua China 25 Index (NYSE:FXI). In fact, all but one component of the Xinhua China 25 Index fell in the city. But small caps were not any better; only ten components of the 162 member Guggenheim Small Cap China ETF (NYSE:HAO) advanced on Thursday.
NASDAQ listed Chinese interent stocks lost momentum on Wednesday and fell along the market. There is not much good news at the moment for Chinese ADRs.