June 21, 2011 (Chinavestor) Chinese stocks soared in Asia on Monday, sending both key indices higher for the day. The Shanghai Composite Index (SHA:000001) rose 26.4 points or 1.0% while the Hang Seng index (INDEXHANGSENG:.HSI) gained 251.1 points or 1.1%. Investors in Asia found merit in two factors: a strong market day in the U.S., where all but 4 components of the 30 member DJIA advanced, and two that Europe seems to be determined to bring Greece out of the brink of near bankruptcy. Broad advances in Asia bode well for the large cap China ETF, the iShares FTSE/Xinhua China 25 Index (NYSE:FXI), as well as the Guggenheim China Small Cap ETF (NYSE:HAO).
The advance was universal in both Hong Kong and Shanghai. All but five components of the forty-two member Hang Seng Index (INDEXHANGSENG:.HSI) advanced, highlighting the broad support Chinese stocks enjoyed in Hong Kong. The same was true in Shanghai where stocks that advanced outnumbered those that fell ten to one among the 50 largest components of the Shanghai Composite index (SHA:000001).
Chinese exchange-traded-funds or ETFs were sluggish on Monday but that's about to change on Tuesday. All but two components of the 25 member iShares FTSE/Xinhua China 25 Index (NYSE:FXI) advanced in Hong Kong on Tuesday, suggesting a sound market day for the most liquid Chinese ETF. But outlook for the most widely used small cap ETF, the Guggenheim China Small Cap ETF (NYSE:HAO), is just as good for over 100 components of the 162 member index advanced on Tuesday.