China Stocks Buffeted by U.S. Economy

You can’t say Chinese stocks lack direction. They’ve got all the directions covered: straight up on Tuesday, horizontal Wednesday and straight down Thursday. And they are on track to end yet another week with little change.

Overseas forces continued to stir up Chinese stocks in the gateway of Hong Kong. Tuesday it was the easing of the Euro-debt crisis that boosted Hong Kong’s blue chip Hang Seng Index 2.5%. According to Conita Hung, head of equities at Delta Asia Financial, on Thursday it was fear weak economic figures would portend an end to the struggling recovery in the U.S. that led a 1.6% retreat. After the wild ride the index is up a tiny 0.5%.

The one constant is China’s drive to control stubborn inflation by squeezing economic growth.

For the short term, Hung said, “I expect prices to test lower.” But for the rest of June she expects the Hang Seng to trade between 22,500 and 24,000 – as it has all year.

Commodity producers were among the big losers in the latest drop as prices for oil and copper and other metals fell. Jiangxi Copper (358) sank 3.0%.  End

DAILY FIX

Hong Kong Blue Chips: -373,  -1.6%, to 23,254, 06-02-11, Hang Seng Index

Chinese Stocks in Hong Kong: -256,  -1.9% to 12,977, 06-02-11, HSCE Index

Shanghai Stocks: -1.4%, 2,705, 06-02-11, Shanghai Composite Index.

Chinese Stocks in the U.S.: -8.1 to 437.2, 06-01-11, Bank of New York Mellon, ADR Index-China

Insight: China stocks in Hong Kong opened sharply lower and stayed there after a plunge in prices on Wall Street. Solar energy stocks tumbled after Moody’s reported an oversupply in the industry: GC Poly Energy (3800) -7.5%. KGI Research

Quotable: “We maintain our view that the central government will not relax its macro-control measures in the coming month because the crucial indicator, the CPI index, has not fallen below 4%.” Haitong Securities. 6-1-2011

Chinese Company to Watch: “While most China developers are struggling in the credit-tightened environment, cash-rich SOHO China considers FY11 a good time for bottom-fishing in the land market. It has lifted its FY11 budget for acquisitions from Rmb10b to Rmb15b.” Haitong Secutirties. 6-1-2011

Brokerages and analysts cited have disclaimers on their websites emphasizing their statements are for information only. They do not endorse my blog, and I don’t endorse them.

For a list of Chinese companies sold in the U.S. and information on each company go to http://www.adrbnymellon.com/dr_country_profile.jsp?country=CN