August 17, 2011 (Chinavestor) Investors continued to digest a slew of information about the health of the global economy in Asia. Lack of direction was apparent in both key Chinese stock markets on Wednesday. The Shanghai Composite Index (SHA:000001) shed 6.9 points or 0.3% while the Hang Seng Index (INDEXHANGSENG:.HSI) advanced 0.4%. Value investors stepped forward and bought oversold Chinese shipping companies in Hong Kong. China COSCO (HKG:1919) and China Shipping Development (HKG:1138) made it to the best five components of the Hang Seng Index (INDEXHANGSENG:.HSI) on Wednesday. But power producers fell after a solid start of the week as price of oil continued to climb. Huaneng Power International (HKG:0902), China's largest independent power producer, fell 2.6% in line with Huadian Power (HKG:1071).
China South Locomotive (SHA:601766), one of the main manufacturer of China's bullet trains, fell the most among the 50 largest components of the Shanghai Composite Index (SHA:000001). Shares of the company dived 20% after the deadly bullet train accident and has been unable to break away from those lows so far. China Shenhua Energy (SHA:601088), the largest coal miner in China, fell the second most among large caps in Shanghai, pressuring the rest of the sector.
Components of key Chinese ETFs traded mixed in Asia on Wednesday. China Telecom (HKG:0728) fell the most among components of the iShares FTSE/Xinhua China 25 Index (NYSE:FXI) while China Coal (HKG:1898) shined. Air China (HKG:0753) and Huaneng Power Int. (HKG:0902) fell as price of oil rose on mixed U.S. supply data.
Small caps were more volatile than larger counterparts, as components of the Guggenheim China Small Cap ETF (NYSE:HAO) testify.
Earnings continue to play a major roli in the pricing of Chinese stocks listed in the U.S. It proved true again that earnings can make it or break it for small caps. General Steel (NYSE:GSI) surged 14.5% in the last hour of trading amid record volume after the company reported sales increase of 100% YoY. But disappointing numbers sent Vanceinfo Technologies (NYSE:VIT) and China TechFaith Wireless (NASDAQ:CNTF) tumbling over 20%.
Tudou (NASDAQ:TUDO) will start trading today after raising $174 million, people familiar with the case said. The Shanghai based Chinese online video company will start trading at $29 per ADR.
On a corporate front, internet heavy weight will report after the close today. Sina Corp. (NASDAQ:SINA), one of the largest Chinese online portals, is scheduled along with NetEase.com Inc. (NASDAQ:NTES), China's leading online game operator.
Outlook is dim for Huaneng Power Int. (NYSE:HNP) and China Telecom (NYSE:CHA) but bright for Sinopec Shanghai Petrochemical (NYSE:SHI) and Yanzhou Coal Mining (NYSE:YZC), if components of the Hang Seng Index (INDEXHANGSENG:.HSI) were proxy for ADR trading.