September 12, 2011 (Chinavestor) Fears that Greece's ills will spread to the rest of the continent sent China stocks tumbling in Asia on Monday. The Shanghai Composite Index (SHA:000001) remained resilient as investors focused on sound economic data but the Hang Seng Index (INDEXHANGSENG:.HSI) tumbled 836.1 points or 4.4%. This is the third largest loss for the index YTD.
Each and every component of the Hang Seng Index (INDEXHANGSENG:.HSI) fell with Brilliance Auto (HKG:1114) taking the lead. Aluminum Corp. of China (HKG:2600), China Life Insurance (HKG:2628) and Yanzhou Coal Mining (HKG:1171) were among the hardest hit China stocks in Hong Kong. Each and every component fell of the Xinhua China 25 Index as well, boding ill for the iShares FTSE/Xinhua China 25 Index (NYSE:FXI). The Chinese telecom sector weathered the storm relatively well, China Mobile (HKG:0941), China Telecom (HKG:0728) and China Unicom (HKG:0762) were among those China stocks that fell the least for the day.
U.S. stocks fell on Friday after President Obama's jobs plan failed to reassure investors. Each and every component of the DJIA fell for the day. Germany's signal that it is considering a eurozone without Greece sent world markets tumbling. Worries now spread from Greece to the rest of the eurozone, including too big to fail Spain and Italy. Each and every major European market is trading significantly lower right now.
Traders in Hong Kong keep a close eye on the global economy while mainland investors focus on Chinese economic and corporate news. The Hang Seng Index (INDEXHANGSENG:.HSI) opened significantly lower and continued the slide after European markets opened. China stocks listed in Hong Kong fell even harder than the rest of the market. The Hang Seng China Enterprise Index (INDEXHANGSENG:HSCEI) dived 4.79%, slightly over that of the Hang Seng Index (INDEXHANGSENG:.HSI).
The Xinhua China 25 Index, comprised of the largest Chinese stocks listed in Hong Kong, fell universally. Power and energy stocks fell hard but telecoms fared better. China Mobile (HKG:0941), China Telecom (HKG:0728) and China Unicom (HKG:0762) were among the best performing China stocks in Hong Kong for the day.
The decline was less universal among small caps, as components of the Guggenheim China Small Cap ETF testify. But make no mistake, the mood was somber, signalling a similar bloodbath among China stocks listed in the U.S.