June 20, 2011 (Chinavestor) Fears that Europe is still short of a long-term solution for Greece's ills pushed China stock indices lower in Asia on Monday. The Shanghai Composite Index (SHA:000001) fell 20.2 points or 0.8% in tandem with the Hang Seng Index (INDEXHANGSENG:.HSI). Hong Kong's main gauge lost all early morning gains by the end of the day, closing 95.8 points or 0.4% lower at 21,599.51 points.
Greece's problems hurt the common currency, the Euro, and boosts the dollar in return. A stronger dollar makes oil and other commodities cheaper, weighting down energy and resource heavy indices. But there was some good news for the day: home prices fell in 23 of 70 cities in China in May as government curbs started to have a bite. This is a big change from April when prices in all 70 cities rose.
Chinese ETFs are looking puzzled from last Friday but are expected to follow markets lower on Monday. Eleven components of the twenty five member iShares FTSE/Xinhua China 25 Index (NYSE:FXI) rose in Asia, a slightly negative bias before the NYSE open. But small caps suffered a more universal sell off. Stocks that fell outnumbered those that advanced two to one among components of the Guggenheim China Small Cap ETF (NYSE:HAO).
Airliners advanced in Asia, but China Eastern Airlines (HKG:0670), as price of oil fell to a fresh four months low. China Coal (HKG:1898) fell the most among Chinese coal miners while China Shenhua Energy (HKG:1088) and Yanzhou Coal Mining (HKG:1171) advanced. ICBC (HKG:1398), the largest Chinese financial institution, weighted down the Hang Seng Index (INDEXHANGSENG:.HSI) thanks to a 0.7% decline.
Monday outlook is dim for Chinese stocks listed in U.S. soil as index futures point to a lower open. But if trading in Asia is a proxy, China Southern Airlines (NYSE:ZNH), China Unicom (NYSE:CHU) and Yanzhou Coal Mining (NYSE:YZC) have a chance to beat the markets for the day.