Feb. 9, 2010 (Chinavestor) Shares of Chinese companies showed some strength in Shanghai but rallied in Hong Kong after property developer, China Overseas Land & Investment Ltd. (HKG:0688), reported record revenue. The Hang Seng Index rose +239.39 points or +1.22% to 19,790.28 at the close. The rally was universal with energy and property stocks taking the lead. CNOOC Ltd. (HKG:0883) (NYSE:CEO) was the best performing HKEx-NYSE cross listed blue chip of the day with a +3.5% jump followed by Petrochina Co. and Yanzhou Coal.
Part of the rally is due to a fact that Jean-Claude Trichet, President of the European Central Bank, left an important financial meeting in Sydney a day earlier, suggesting Europeans will come to the help of Greece. Outlook for the euro improved, commodity prices strengthened helping resource players along the way.
Investors in Shanghai got spurred by strong auto sales in January. According to the latest statistics, January car sales grew to 1.66 million units, including commercial vehicles, more than double of last January data. Government tax incentives and subsidies have played a major role in such a fast growth.
S&P and NASDAQ index futures point to a higher open for Tuesday. This will help oversold Chinese ADRs to find a bottom, at least for the short term. Expect large cap oversold stocks to outperform, with commodity and oil players in focus. For a detailed stocks specific break down, read today's overbought/oversold report.