China stocks trade water, Asia, Jan 25

China stocks were mixed in Asia as worries about inflation and earnings linger around. Earnings and consumer confidence is going to drive U.S. indices where investors want to find reasons for more upside. With so much uncertainty around, investors were defensive in Asia sending both key Chinese indices lower for the day. The Shanghai Composite Index (SHA:000001) fell 18.3 points or 0.7% while the Hang Seng Index (INDEXHANGSENG:.HSI) shed 12.9 points or 0.1%

Resource and commodity stocks were mixed in Shanghai for the day. Zijin Mining (SHA:601899), China's largest gold miner, and Jinduicheng Molybdenum (SHA:601958), the largest producer of the metal, fell the most among the 50 largest components of the Shanghai Composite Index (SHA:000001). But Jiangxi Copper (SHA:600362), the largest Chinese copper producer, was the best performing large cap component of the index.

The ambiguity carried over to industrials as well: SAIC Motor (SHA:600104), the largest Chinese car manufacturer, rose 1.4% but China South Locomotive (SHA:601766) fell the most among the 50 largest components of the Shanghai Composite (SHA:000001).

Traders in Hong Kong were defensive ahead of U.S. earnings and consumer confidence report. The Hang Seng Index (INDEXHANGSENG:.HSI) was virtually unchanged with Shanghai Electric Group Company Limited (HKG:2727) tumbling hard.

Most large cap components of the Xinhua 25 Index fell, boding ill for the iShares FTSE/Xinhua 25 China Index (NYSE:FXI) for Tuesday. Sinopec Corp. (NYSE:SNP), China's largest refiner, advanced 0.6% as crude prices eased from $92/barrel to $86/barrel. Aluminum Corp. of China (HKG:2600) got a lift from Alcoa Inc. (NYSE:AA) and rose 0.4%. But Zijin Mining (HKG:2899), Air China (HKG:0753) and Ping An Insurance (HKG:2318) fell hard for the day.

Components of the Hang Seng Index (INDEXHANGSENG:.HSI) are giving no direction to Chinese ADR trading this morning. U.S. earnings and consumer confidence are in focus besides technicals like the overbought/oversold indicator.