Heads of European Union member states will have a summit trying to find a solution to the debt crisis. The Hang Seng Index (INDEXHANGSENG:.HSI) eked out a small 42.6 points or 0.2% gain while the Shanghai Composite Index (SHA:000001) shed 14.1 points or 0.6%.

Shipping and transportation stocks rose at the expense of safe havens: telecom and gold. Zijin Mining (HKG:2899), China's largest gold miner, fell the most among 42 components of the Hang Seng Index (INDEXHANGSENG:.HSI). China Telecom (HKG:0728) shed 1.6% while China Mobile (HKG:0941), the largest mobile carrier in the world, declined 0.8%. But oversold China COSCO (HKG:1919) and China Shipping Development (HKG:1138) bounced off bottom and surged 4.3% and 3.9%, respectively.

Trading in Shanghai missed direction. Investors sent the index to a new 31 month low as China's economy slowed and Europe, China's largest trading partner, remains trenched in debt problems. China COSCO (SHA:601919) was the best performing large cap component of the Shanghai Composite Index (SHA:000001) as value investors snapped up share s of China's largest container shipper.

Chinese stocks in the U.S. have the following key drivers on Friday. GE in-line earnings before the bell helped restore confidence in the U.S .economy. European, notably German, indices are trading sharply higher in the afternoon on hopes that the EU summit will deliver a breakthrough in the debt crisis. Moody's warning that France may receive a downgrade is a sure sign that the debt crisis is engulfing not just peripheral states like Greece and Portugal but reached the core of the eurozone by now. All eyes will be on the summit and will be a key driver of markets for the upcoming weeks. Read More