Chinese shares rose on Monday, reversing early losses as Asian markets edged up after last week's dip, with investors gearing up for earnings results from big hitters including banking giant HSBC.
The benchmark Hang Seng Index .HSI was up 0.79 percent at 23,193.29 by the midday trading break after opening about half a percent lower. The China Enterprises Index .HSCE of top locally listed mainland companies led rose 1.2 percent.
In China, the Shanghai Composite Index .SSEC was up 0.2 percent at 2883.4, still below the 2,900-level breached last week as markets were shaken by surging crude oil prices and political turmoil in the Middle East.
The market's upside is limited because of tightening measures and further economic uncertainties, said UOB Kay Hian analyst Wang Aochao in Shanghai.
China's annual parliamentary session starts on March 3 and new economic policy measures could be unveiled to tackle rising housing and food prices.
Premier Wen Jiabao said over the weekend that fighting inflation was a priority for China even as the official GDP target for the 2011-2015 growth plan is 7 percent per year, down from the 11.2 percent growth China averaged annually in the last five-year period.
Wen's comments were fully factored in. We've been talking about lower growth targets for a long time so I believe there isn't any significant impact on the market, said Wang.
EARNINGS IN FOCUS
Annual results from several large companies are expected this week as investors turn their focus to corporate profitability and the outlook for margins amid a backdrop of rising energy and food prices.
Europe's largest lender HSBC Holdings Plc is scheduled to report its earnings after the Hong Kong market closes. The average forecast from analysts polled by Reuters Estimates pointed to a near tripling of annual profit as bad debts fell.
High expectations among investors have sent Hong Kong-listed shares of the bank up 12.5 percent this year, easily outpacing the Hang Seng Index's 0.7 percent gain, partly on optimism that they would be rewarded with a higher dividend.
AIA Group Ltd rose 1.8 percent following a gain of as much as 6 percent on Friday, after posting a 54 percent increase in net profit.
In contrast, Sino Land Co Ltd stumbled 1.4 percent after the company's margins on certain high-end sales in Hong Kong came in lower than analyst expectations.
Further clarity on the outlook for Hong Kong's hot property market could come when Sun Hung Kai Properties Ltd, Asia's largest developer by market value, reports its results later on Monday.
Sun Hung Kai shares were up 0.4 percent by midday but had traded down as much as 2.2 percent earlier.