April 26, 2010 (Chinavestor) Stock markets advanced in Asia and Europe as Greece accepted the bailout and strong U.S .earnings suggested the economic recovery is sustainable. But investors in Shanghai were all bloom and gloom after the government tightened financing for real estate. The Shanghai Composite Index (SHA:000001) fell -0.5% while the Hang Seng Index (INDEXHANGSENG:.HSI) rose 1.6%. Energy stocks shined in Hong Kong, Yanzhou Coal (HKG:1171) jumped 7.2% while CNOOC Ltd. (HKG:0883) (NYSE:CEO) rose 2.9%. China Shenhua (HKG:1088), the largest Chinese coal miner, advanced +2.8% and Petrochina Co. Ltd. (HKG:0857) (NYSE:PTR), the largest Chinese oil producer, rose 1.8%.
Chinese ADRs are expected to follow U.S. market higher in early morning trade. WuXi Pharmatech (NYSE:WX) is acquired by Charles River Lab at $21.25/share. Sohu.com (NASDAQ:SOHU) reported 2010 Q1 earnings before the open on Monday. First quarter revenues grew to $129.5 million but income fell -32%. Second quarter revenue guidance is ~$140 million, above analysts estimates.
Chinese ADRs have lost their short term momentum, but that may change as we enter the last week of trading in April. The number of overbought China stocks is low but the more and more are getting oversold. This creates opportunity for the momentum investor.