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Shipping stocks sink China indices

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decline August 2, 2011 (Chinavestor) Stocks fell in Asia on Tuesday after disappointing industrial data in the U.S. gave another evidence that the global economic recovery will be slow and gradual. The Shanghai Composite Index (SHA:000001) fell 24.5 points or 0.9% for the day. Transportation and resource companies led the decline on the Mainland. The Morgan Stanley China A-share Fund (NYSE:CAF) is in jeopardy before the opening bell as a result. The Hang Seng Index (INDEXHANGSENG:.HSI) tumbled 241.9 points or 1.1% ending the day at a low point. Airliners and shipping companies led the decline in the city. All but one component of the Xinhua 25 China Index fell, boding ill for its trailing ETF, the iShares FTSE/Xinhua China 25 Index (NYSE:FXI). But small caps were not much better either, casting shadow over short term outlook for the Guggenheim China Small Cap Fund (NYSE:HAO).Earnings continue to move Chinese stocks listed in the U.S. Sohu.com Inc. (NASDAQ:SOHU) and Changyou.com Inc. (NASDAQ:CYOU) tumbled over 10% on Monday and internet travel site Ctrip.com Int. (NASDAQ:CTRP) dived after hours following weak 2011 Q3 revenue guidance.  The Dow Jones Industrial Average (INDEXDJX:.DJI) made a comeback by the end of the trading day but was pressured after industrial activity slowed in the U.S. Export to the world's largest economy will slow investors figured, and sold off transportation and shipping lanes in Hong Kong as a result. China Shipping Development (HKG:1138) and China COSCO (HKG:1919) were the worst performing components of the Hang Seng Index (INDEXHANGSENG:.HSI) of the day.

Investors punished railway and resource stocks in Shanghai. Guangshen Railway (SHA:601333) and China Railway Group Ltd. (SHA:601390) were among the worst performing large cap components of the Shanghai Composite index (SHA:000001). Western Mining (SHA:601168), Aluminum Corp. of China (SHA:601600), and Jiangxi Copper (SHA:600362) weighted down the Shanghai Composite index (SHA:000001) in addition. 

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Outlook for Chinese ETFs is dim ahead the opening bell on Tuesday. The Morgan Stanley China A-Share Fund (NYSE:CAF), an ETF designed to trail the Shanghai Composite Index (SHA:000001), is expected to follow markets lower. But the most liquid Chinese ETF, the iShares FTSE/Xinhua China 25 Index (NYSE:FXI), is expected to experience the largest decline today for all but one of its components fell in Asia on Tuesday. Huaneng Power Int. (HKG:0902) (NYSE:HNP) managed to eke out a small gain but shipping lanes, airlines, resource and financials all fell. The decline was slightly less universal among small cap names. Stocks that fell outnumbered those that advanced four to one among components of the Guggenheim China Small Cap Fund (NYSE:HAO).

Earnings continue to move U.S. listed Chinese stocks. Sohu.com Inc. (NASDAQ:SOHU) and Changyou.com Inc. (NASDAZQ:CYOU) fell over 10% following earnings release. Ctrip.com Int. (NASDAQ:CTRP) fell hard after market trading hours after missing 2011 Q3 guidance. More earnings at China stock earnings calendar, Aug. 1-5



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