September 26, 2011 (Chinavestor) Chinese stocks continued the fall from last week in Asia on monetary concerns. The Shanghai Composite Index (INDEXHANGSENG:.HSI) fell 40.0 points or 1.7% to a new 14 months low. The Hang Seng Index (INDEXHANGSENG:.HSI) declined 261.0 points or 1.5% on top of a 1786.5 points or 9.18% decline last week! China stocks led the decline for the Hang Seng China Enterprises Index (INDEXHANGSENG:.HSCE), measuring the performance of Mainland Chinese stocks in Hong Kong, tumbled 3.3%. This bodes ill for the iShares FTSE/Xinhua China 25 Index (NYSE:FXI), the most liquid Chinese ETF.
Ping An Insurance (HKG:2318) fell along large volume in both key Asian markets. Jiangxi Copper (HKG:0358), the largest maker of the metal in China, tumbled 9.3% as commodity prices sank. But Aluminum Corp. of China (HKG:2600) hit bottom and leveled off in Hong Kong.Had it not been for large cap China Mobile (HKG:0941) and Petrochina Co. Ltd. (HKG:0857), stocks that were basically unchanged, indexes would have suffered a whole lot more. Despite some high profile stocks hitting bottom, most components of the Hang Seng index (INDEXHANGSENG:.HSI) fell on Monday. Stocks that fell outnumbered those that advanced six to one among 42 components of the index. Metal and resource stocks led the decline in Hong Kong. Angang Steel (HKG:0347) was the worst performing component of the Hang Seng Index (INDEXHANGSENG:.HSI) on Monday thanks to a 13.8% dive. Jiangxi Copper (HKG:0358) fell 9.3% while Maanshan Iron & Steel (HKG:0323) declined 7.3%. Zijin Mining (HKG:2899), China's largest gold miner, continued to suffer and fell 10.8% for the day. Related article: Dollar shines more than gold
China stocks fell in Shanghai as well. Investors sold off large cap stocks after the governor of the Central Bank of China warned that inflation remained the largest threat to China's economy. This has been a standard blueprint before additional monetary tightening in the past, prompting investors to sell. While the Shanghai Composite Index (SHA:000001) fell 1.7%, there is more to the story. All but five among the 50 largest components of the index fell. Index heavy weight Petrrochina Co. Ltd. (SHA:601857) and China Petroleum & Chemical Corp. (SHA:600028) came to the rescue of the index for both stocks ended the day slightly in the black. But Ping An Insurance (SHA:601318), Pacific Insurance (SHA:601601) and China Life Insurance (SHA:602628) fell hard in Shanghai as investors prepare for a lower return on investment from these companies. Chinese insurers derive 10%-15% of their income from investment related activities.
All but four among 25 components of the Xinhua China 25 Index fell, in-line with the Hang Seng China Enterprises Index (INDEXHANGSENG:.HSCE). Four NYSE cross-listed stocks led H-share index higher. Aluminum Corp. of China (HKG:2600), China Telecom (HKG:0728), CNOOC Ltd. (HKG:0883) and China Mobile (HKG:0941) managed to eke out some gains for the day. Petrochina Co. Ltd. (HKG:0857) fell a mere 0.6%, far outperforming key indices.