Chinese equity markets ended the second week of August on a high note thanks to a resurgent DJIA on Thursday.The Shanghai Composite Index (SHA:000001) rose 11.7 points or 0.4% on Friday, trimming losses for the week to 1.2%. The Hang Seng Index (INDEXHANGSENG:.HSI) advanced 24.9 points or 0.1% on Friday and is off 6.3% for the week! Investors in Hong Kong keep a close eye on developments in the U.S. because interest rates and the value of the Hong Kong dollar is pegged to their U.S. counterparts. Oversold transportation shares snapped back, pulling the Hang Seng Index (INDEXHANGSENG:.HSI) higher for the day. Beijing Capital Int. Airport (HKG:0694) surged 8.7% trimming losses to 2.5% for the week. China Shipping Development (HKG:1138) jumped 7.1% as well. China Life Insurance (HKG:2628) (NYSE:LFC) rose 3.5% on Friday after suffering heavy losses earlier the week. China Southern Airlines (HKG:1055) and China Eastern Airlines (HKG:0670) were among the best components of the Hang Seng Index (INDEXHANGSENG:.HSI) thanks to lower oil prices. But resource stocks continued to suffer as demand for exports and construction materials may soften due to global economic slowdown. 

Aluminum Corp. of China (HKG:2600) fell 2.5% and is off just shy of 10% for the week. Transportation and industrial stocks did well among components of the Shanghai Composite Index (SHA:000001) as well. China COSCO (SHA:601919), one of the largest shipping lanes in the world, rose 3.0% while China South Locomotive & Rolling Stock (SHA:601766) advanced 2.5%. Shanghai Zhenhua Heavy Industry (SHA:600320) was the best large cap component of the Shanghai Composite Index (SHA:000001). But appetite for gold subdued as equity markets calmed down, pushing shares of Zijin Mining (SHA:601899) lower for the day. Read More