China Markets Surge on National Day Sales and Moody's Vote of Confidence

Asian markets were mixed Friday. In China the Shanghai Composite surged 3.1% to 2,739 and in Hong Kong the Hang Seng Index crept up 0.3% to 22,944. In Japan the Nikkei 225 Index slid 0.1% to 9,589.

Chinese investors came back from the week-long National Day holiday to an exuberant day of trading. In true Chinese fashion, folks in China hit the stores over the holiday period and sales at retail and catering establishments rose 18.7% over last year, according to the Ministry of Commerce. Traveling also proved popular, with China Daily reporting a 24% surge in air travel as compared with figures from last year. The industry clocked up 5.75 million trips and added additional flights to meet the demand. Shares were also pushed higher after Moody's Investors Service said it may raise China's national debt rating, which could make it cheaper for the People's Republic to borrow money.

Big gainers today included wine and spirit maker Kweichow Moutai, which rose 3.1%. Shenzhen Agricultural Products, which operates a chain of supermarkets, soared 3.3%, Henan Lianhua Gourmet Powder, which makes flavorings including MSG (available in most Chinese supermarkets), climbed 2.5% and Bright Dairy & Food rose 2.2%.

Major appliance makers scored today with Suning Appliance shooting up 3.2% and Qingdao Haier adding 1.2%.

Among airlines, China Eastern Airlines shot up 5.7%, Air China rocketed up 4.5% and China Southern Airlines gained 4.3%. Smaller carriers also gained with Shandong Airlines rising 1.9% and Hainan Airlines inching up 0.1%.

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In Hong Kong, news that Zijin Mining will be fined $1.4 million, according to Bloomberg, after a toxic spill poisoned millions of fish and contaminated a major fishing lake, didn't hurt the gold mining firm. More importantly to investors, gold futures hit a record in Shanghai and the price of gold surged to $1,364.77 per ounce yesterday. Zijin Mining rallied 12.4% and Shandong Gold Mining jumped 10%.

Xinjiang Goldwind Science & Technology, a maker of wind generating plants, surged 6% in today's IPO, with investors gambling that China will invest in clean energy and establish wind farms to create it.

Hong Kong real estate firms fared well today with Cheung Kong climbing 3.4%, Sun Hung Kai advancing 2.3% and Henderson Land rising 1.3%. New World Development fell 0.7%, China Overseas lost 0.5% and China Resources Land slid 0.4% after fears of new restrictions on property purchases became a reality in Shanghai, where as of yesterday, families are now only allowed to purchase one new apartment each. An analyst from E-House China told China Daily, "Shanghai's property regulation is the toughest in the nation, which might send a strong signal to the housing market. No speculation is encouraged in the sector."

In Japan, the yen strengthened to a new 15-year record high against the dollar, sending exporters lower. Carmakers tumbled with Isuzu slumping 2.7%, Toyota diving 2%, Mitsubishi Motor falling 1.9% and Honda sliding 0.9%. Mazda gained 1.4%.

Casio Computer sank 6.3%, Olympus slipped 1.7% and Canon lost 1.2%, but some exporters made headway with Panasonic surging 3.4% and Sony adding 1%.

Retailers gave back some of yesterday's gains with Fast Retailing losing 2.3% and J. Front Retailing edging down 0.5%. Even Seven & I Holdings, owner of the omnipresent 7-Eleven shops, fell 3.7% after slashing it's sales forecast for the year. While Japanese ministers argue over future interventions, the market continues to swing, sensitive to every tidbit of economic news.