October 7, 2011 (Chinavestor) China stocks enjoyed the best two-day gain since 2008 thanks to a 534.7 points or 3.0% surge of the Hang Seng Index (INDEXHANGSENG:.HSI) on Friday. Hopes that Europe will get its financials in order sent stocks higher globally in the second part of the week. But it all started out where September left, with steep losses on Monday and Tuesday. The index fell 1342.2 points or 8.1% Monday and Tuesday combined but snapped back 1,450.7 points on Thursday and Friday. Mainland Chinese stocks pulled indices higher evidenced by the 3.69% rise of the Hang Seng China Enterprises Index (INDEXHANGSENG:.HSCEI). China Shipping Container Line (HKG:2866) surged 18.5% bouncing off 52 week lows as outlook for Chinese export improved. Resource and energy stock rallied on rising commodity and energy prices. Zijin Mining (HKG:2899), the largest Chinese gold miner, surged 16.6%. Yanzhou Coal Mining (HKG:1171) was the best HKEx-NYSE cross listed blue chip thanks to a 6.3% advance. CNOOC Ltd. (HKG:0338), China's offshore oil driller, took advantage of rising crude prices ending 4.4% higher for the day. Chinese airliners continued to bounce back strongly. China Southern Airlines (HKG:1055) and China Eastern Airlines (HKG:0670) surged 6.1% and 4.7%, respectively.
The Shanghai Stock Exchange remained closed for the week in observance of a National Holiday. Going forward, all important non-farm payroll data will be eyed by investors on Friday. European indices are trading sideways before the key economic data.
U..S. listed Chinese stocks piggybacked the DJIA and advanced strongly on Thursday. Technology stocks bounced back off after industry leaders caught fire. Baidu.com Inc. (NASDAQ:BIDU) surged $9.72 or 8.74% breaking through the $120 level. Risk appetite returned as well, for AgFeed Industries (NASDAQA:FEED) and other small caps skyrocketed.
If trading in Asia were a proxy for direction of ADRs, outlook is best for Yanzhou Coal Mining (NYSE:YZC) and CNOOC Ltd. (NYSE:CEO). Chinese airliners have a lot of ground left to make up as well. Aluminum Corp. of China (NYSE:ACH) is looking good as well. But H-shares of China Mobile (NYSE:CHL) and China Telecom (NYSE:CHA) underperformed in Hong Kong on Friday boding ill for their respective ADRs.