September 28, 2011 (Chinavestor) Chinese stocks fell in key Asian markets on Wednesday. The Hang Seng index (INDEXHANGSENG:.HSI) gave back 119.5 points or 0.7% after a 722.8 points surge a day before. Aluminum Corp. of China (HKG:2600) and Jiangxi Copper (HKG:0358) led losses by basic materials amid fears global economic slowdown will hurt demand. Index heavy weight China Mobile (HKG:0941) succumbed to profit taking and fell 0.84%. China Southern Airlines (HKG:1055) extended gains after a 10.3% surge on Tuesday and rose 2.53%. Air China (HKG:0753), China's flagship carrier, rose 6.2% while China Eastern Airlines (HKG:0670) was unchanged.But investor confidence evaporated by the end of the trading day on the mainland, sending the Shanghai Composite Index (SHA:000001) to 14 month lows. The decline was universal, stocks that fell outnumbered those that advanced 25 to 1 among the 50 largest components of the index. Had it not been for a 0.6% advance of index heavy weight Petrochina Co. Ltd. (SHA:601857), the index would have slipped a lot more. Chinese property developers fell amid concerns of additional monetary tightening. Poly Real Estate (SHA:600048), the largest Shanghai listed developer, fell 1.75%. Metrocar maker China CNR Corp. (SHA:601299) fell following a subway collision in Shanghai that hurt 271 people a day before.
Outlook is mixed for Chinese ETFs ahead the opening bell. Stocks that advanced slightly outnumbered those that fell among the 25 components of the Xinhua China 25 Index. The index is the basis for the most liquid Chinese ETF, the iShares FTSE/Xinhua China 25 Index (NYSE:FXI).
If trading of components of the Hang Seng Index (INDEXHANGSENG:.HSI) were proxy for Chinese stocks trading in the U.S., outlook is best for Huaneng Power (NYSE:HNP), CNOOC Ltd. (NYSE:CEO) and Yanzhou Coal Mining (NYSE:YZC). But China Mobile (NYSE:CHL), China Telecom (NYSE:CHA) and Aluminum Corp. of China (NYSE:ACH) are expected to gap down at the open.