HONG KONG, Feb 28 Reuters A set of bumper earnings reports from the likes of Baidu Inc and other Chinese internet giants isn39;t impressing hedge funds and other investors who have cut exposure to the stocks and seem to be waiting for more good news.

For the now, investors remain wary of a market overshadowed by simmering SinoU.S. tensions over technology and geopolitics and a lack of clarity on policy and regulation.

This coolness toward the sector was displayed last week when search engine giant Baidu and ecommerce titan Alibaba Group Holdings, delivered the first earnings briefings since China reopened its economy following the removal of zeroCOVID curbs.

Despite easily beating expectations for their earnings and giving optimistic forecasts for the recovery in demand, shares in both companies fell.

At this point, with geopolitical risks still high and valuations above levels just a few months ago, we are cautious, said John Pinkel, partner of Indus Capital, a New Yorkbased hedge fund. Pinkel says his Indus Select Strategy increased exposure in the fourth quarter but is stalling now.

China39;s reopening in December after three years of COVID19 lockdowns spurred a surge in the stock market, and analysts say hedge funds were the biggest drivers of that rally, which began at the end of October.

Mark Dong, cofounder of Minority Asset Management, who is based in Hong Kong, says expectations for Chinese growth are clouded by doubts over how Beijing plans to stimulate…