Asia Stocks: A Boost for India
The Hang Seng Index rebounded from negative territory on Friday to close up 126.75 points, or 0.5%, to 24,148.43. Early morning losses in the region might have been caused by Goldman Sachs cutting its rating for Hong Kong banks from positive to cautious. The Shanghai Index wasn't as lucky closing, down 1.2% to 4,497.13
Investors fear China's central bank will have to increase interest rates, or risk inflation spiraling out of control. Investors are also concerned about the rapid rise in China's money supply, which saw the M2 rise by 18.9% in January, up from 16.7% in December. Consumer prices also rose 6.5% in December, which marked the highest increase in 11 years.
Chinese exports also grew by 26.7% for January up from 21.7% for December. Inflation concerns didn't stop U.S. investors from accumulation shares in iShares FTSE/Xinhua China 25 Index (FXI), which traded up 4% Friday on above-average trading volume.
Chinese alternative energy ADRs have been experiencing extremes in volatility all week. That volatility was met with some awesome numbers out of Yingli Green Energy (YGE) on Friday. The Chinese solar-cell maker reported its fourth-quarter profits soared on higher revenue from PV modules.The firm earned $19 million in the fourth quarter compared with $10.9 million for the fourth quarter in 2006. The earnings excitement was short-lived after YGE guided 2008 revenue below Wall Street estimates. Share of YGE closed down 12% on 3 times the average trading volume. The heavy selling pressure in YGE hit the entire sector across the board with JA Solar Holdings (JASO) falling 8%; Solarfun Power Holdings (SOLF) dropping 5%; and Suntech Power Holdings (STP) declining 4%. Chinese oil stocks were in high demand on Friday as crude oil prices closed in on $100 a barrel. Cnooc (CEO) traded up 5%, China Petroleum & Chemical (SNP) rose 4%, Sinopec Shanghai Petrochemical (SHI) climbed 4.5% and PetroChina (PTR) traded up 3%. Rising aluminum and copper prices also helped to take up shares in Aluminum Corp. Of China (ACH) by 5%. Make sure to check out the Far East Portfolio every night to find out which stocks in India and China are making big moves and announcing major news.
India RecapInvestors continued to find bargains in beaten-down Indian stocks on Friday. The Sensitive Index finished the week on a positive note closing up 348.62 points. or 2%, to 18,115.25. Indian markets were also helped by some positive comments on inflation and growth out of Prime Minister Manmohan Singh at a conference in New Delhi. Sigh assured investors that fighting inflation will continue to be his number one priority. "I am confident that this year too we will be able to sustain 9% growth and hold the price line at acceptable levels," Singh said. India saw another boast in foreign investor confidence on Friday after the NYSE Euronext (NYX) agreed to buy a 5% stake in the Multi Commodity Exchange of India (MCX) for $55 million according to the Economic Times. The deal will give NYSE Euronext exposure to the fast-growing and vibrant commodities market in the Far East. Tata Motors (TTM) has reached an agreement with French inventor Guy Negre to develop an air-powered car. Terms of the agreement weren't disclosed, but the cost of car is expected to be around $5,000, according to Cleantech.com. Indian brokerage firm Emkay also put out a research report Friday with a buy recommendation for TTM. Shares closed Friday up 1% on light trading. Mahanagar Telephone Igam (MTE) announced plans to roll out its mobile TV service on Friday. The service will be free to customers who have unlimited phone contracts and GPRS-enabled phones. Sify.com reported the Indian telecommunications provider will look to launch the service on a wider scale in April. Shares of MTE closed down 1%.
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