February 1, 2011 (Chinavestor) Chinese stocks continued to rise, albeit at a slower pace, in Asia on Tuesday. The Shanghai Composite Index (SHA:000001) rose 8.7 points or 0.3% while the Hang Seng Index (INDEXHANGSENG:.HSI) advanced 35.6 points or 0.2%. Earnings and news from Egypt moved the markets, stopping the rally of oil and commodities. But Chinese stocks were kept at bay by news that China's manufacturing activity remained strong, underscoring calls for more monetary tightening.
U.S. listed Baidu.com Inc. (NASDAQ:BIDU), the largest search engine in China, beat estimates and is up 7% in pre-market trading. That news will galvanize the rest of the sector, boosted by strong earnings from AsiaInfo-Linkage (NASDAQ:ASIA) and Changyou.com Ltd. (NASDAQ:CYOU).
Oil stocks continued to drive the Hang Seng index (INDEXHANGSENG:.HSI). Oversold CNOOC ltd. (HKG:0883) jumped 2.7% followed by Petrochina Co. Ltd. (HKG:0857), China's largest oil producer. Petrochina Co. Ltd. (NYSE:PTR) rose 6% in the last two days in Asia, its best two day jump for the past three months. But airliners continued to feel the pressure from high oil prices and fell.
Resource and oil stocks moved the Shanghai Composite Index (SHA:000001) higher. Aluminum Corp. of China (SHA:601600) surged 2.8% followed closely by Petrochina Co. Ltd. (SHA:601857). But industrials fell led by Saic Motor (SHA:600104), China's largest auto maker, and China South Locomotive (SHA:601766), as fears of tightening might choke growth.
Looking at components of key Chinese ETFs in Asia this morning, energy stocks led the Xinhua 25 China index higher. But the advance was not limited to large caps as components of the Guggenheim Small Cap China ETF (NYSE:HAO) testify. Stocks that advanced outnumbered those that fell two to one among the 162 components of the HAO.
Earnings will remain in the focus for Chinese ADRs as internet stocks continue to report. Strong earnings from Baidu.com (NASDAQ:BIDU) continue to galvanize the rest of the sector. Sohu.com (NASDAQ:SOHU) and its online game arm, Changyou.com (NASDAQ:CYOU) reported sound earnings yesterday, boosting sentiment for the sector.