Asia Stocks: Data-Driven Volatility

Updated from Feb. 19 at 7:21 p.m. EST

Asian markets advanced Tuesday in the face of rising volatility and bearish inflation data. The Hang Seng Index closed up 1.5% at 24,123.17, and the Shangahi Composite Index finished up 2.1% at 4,664.29.

Chinese stocks were able to survive early volatility after the government reported that China's inflation rate rose to its highest level in 11 years. Consumer prices spiked up 7.1% in January from a year earlier, advancing from a 6.5% increase in December, according to the National Bureau of Statistics. Economists put the blame on China's rising inflation and food prices due to recent sever blizzards that have caused crop damage and shortages in food supplies.

Some strong advancers among the Chinese ADRs on Tuesday were China Digital TV (STV Quote), up 7%; Focus Media (FMCN Quote), up 4%; China Techfaith Wireless (CNTF Quote), up 5%; and Cnooc (CEO Quote), up 5%.

Shares of Chinese Internet online gaming firm NetEase (NTES Quote) rose 6% ahead of the firm's earnings report set for Wednesday after the market close. Susquehanna Financial Group analyst Co Ming Zhao issued a client note on Tuesday that predicted NTES will beat Wall Street estimates. NetEase shares were trading up on over twice the average daily volume.

Another winner in the sector was Chinese online Internet portal Sina (SINA Quote), which rose 1.5% after Pali Research analyst Tian Hou reiterated a buy rating and $69 price target on the stock. Sina is set to report earnings on Wednesday.

Some other names in the sector on the move Tuesday were Sohu.com (SOHU Quote), up 1%; Giant Interactive Group (GA Quote), up 8%; and Baidu.com (BIDU Quote), falling 5%. China's top search engine took a hit after news broke that the firm has been censured by the Chinese government for allegedly spreading racy photos of several Hong Kong pop stars, according to USA Today. A Goldman Sachs Group analyst also made some bearish comments on Baidu.com Tuesday saying the search engine could see a decline in sales growth and share price.

Billionaire Ron Burkle's private equity firm Yucaipa Company announced an increased stake in Xinhua Finance Media (XFML Quote) on Tuesday. Burkle raised his stake in XFML to 12% after buying 30 million convertible preferred shares. Shares of XFML finished down 2% on above-average daily volume.

Melco Entertainment (MPEL Quote) reported a smaller fourth-quarter loss than previously expected on Tuesday. The Macau casino posted a fourth-quarter loss of $36.5 million, narrower than the $53 million loss it reported a year earlier. The improvement was helped by performance from its Crown Macau casino. A Citigroup Investment Research report published Tuesday rated MPEL a buy with a price target of $16.30. Melco's American depositary shares rose 3%.

On the downside were alternative energy names Yingli Green Energy (YGE Quote), falling 7.5%; Suntech Power Holdings(STP Quote), declining 5%; Trina Solar (TSL Quote), down 5%; and Solarfun Power Holdings (SOLF Quote), also down 5%.

Be sure to check out the Far East Portfolio at Stockpickr.com every night to find out which stocks in India and China are making big moves and announcing major news.

India Recap

The Sensitive Index rose modestly Tuesday by 27 points to 18,075.66. India's benchmark Index was hit with a wave of selling pressure after trading to a high of 18,314.10 in early afternoon trading.

India announced a major $2 billion deal with U.S.-based military defense contractor Lockheed Martin(LMT Quote) for the purchase of military transport plans and helicopters. India is also considering Lockheed and Boeing(BA Quote) for a $10 billion contract for 126 fighter jets to replace its Russian fighter jets.

India's largest commodities exchange, the Multi Commodity Exchange (MCX), has filed a prospectus with market regulators for an initial public offering. MCX will look to raise $131 million, according to the Financial Times.

Leading the pack for Indian ADRs on Tuesday were Tata Communications(TCL Quote), up 2.3%; Sify Technologies(SIFY Quote), up 2.3%; and Rediff.com(REDF Quote), up 1%. All three stocks traded up on no news.

HDFC Bank(HDB Quote) introduced a new service on Tuesday that allows customers to make credit card payments with their Reliance Communication mobile phones. HDFC Bank plans to introduce the service with other Indian mobile phone firms in the future, according to financialexpress.com. Shares of HDB fell 1.3%.

On the downside, Infosys(INFY Quote) fell 12 cents, or 0.3%, despite signing a strategic alliance with Japanese software service firm Nihon Unisys. The deal will help give INFY more exposure to the Japanese IT market. Another notable decliner was WNS Holdings(WNS Quote), which fell by 5% on no news.

Be sure to check out the Far East Portfolio at Stockpickr.com every night to find out which stocks in India and China are making big moves and announcing major news.