Asia Stocks: Waiting on the Feds

India's Sensitive Index advanced for a third day in a row as investors in the Far East prepared to hear from India's Finance Minister, Palaniappan Chidambaram, on the country's economic budget Feb. 29. Market players are hoping that Chidambaram will cut income and corporate taxes in an effort to stimulate growth.

"With growth expected to slow due to higher rates and uncertainty regarding the impact of the U.S. recession, we expect the finance minister to provide some stimulus by reducing corporate and income taxes," said Tushar Poddar, an economist for Goldman Sachs Group. The Sensitive Index traded up slightly by 19.8 points, or 0.1%, to 17,825.99.

Leading the advancers among Indian ADRs Wednesday were online Internet portal Rediff.com (REDF Quote), up 5% to $8.79; business outsourcing firm WNS Holdings (WNS Quote), up 3.5% to $15.34; and HDFC Bank (HDB Quote), up 3% to $116.30.

The Financial Times reported that Tata Motors (TTM Quote) and Ford Motors (F Quote) are making progress in a deal to sell luxury car brands Jaguar and Land Rover to Tata for $2 billion. Shares of TTM closed roughly flat, down 0.7% at $18.02, and Ford finished up 1.2% at $6.60.

In the technology sector, Infosys (INFY Quote) was chosen as one of three global preferred venders for software and IT services by diesel and natural gas engine maker Cummins (CMI Quote), according to a company press release. Shares of Infosys fell 0.9% to $42, and CMI fell 0.9% to $52.90.

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.

China Recap

Hong Kong stocks rose sharply Wednesday after the government introduced tax-relief initiatives and waived business registration fees and rates. "Measures introduced in the fiscal 2008 budget are not expected to impair the government's financial position in the medium term," said S&P credit analyst Kim Eng Tan.

The Hang Seng Index closed up 610.06 points, or 3.2%, at 24,483.84. Stocks in China also roared ahead, as value investors scooped up shares of firms they deemed to be trading at attractive levels. The Shanghai Composite Index closed up 2.3% at 4,334.05.

Chinese search engine provider Baidu.com (BIDU Quote) was a big winner among the Chinese ADRs. Shares of Baidu exploded higher by $21, or 8.8%, to $258.85. Many market participants contributed the rally in Baidu to an oversold technical bounce. The stock also benefited from an upgrade of sector leader Google (GOOG Quote) by Bank of America.

Bank of America remained active with a slew of downgrades for the Chinese alternative energy stocks. The firm downgraded four Chinese solar names and cut its price target for all of the stocks, citing gross margin concerns from silicon, weak demand in Spain and Germany and higher supply concerns for modules.

Analyst Eric Brown cut JA Solar Holdings (JASO Quote) and Yingli Green Energy (YGE Quote) from buy to neutral. He also cut Solarfun Power Holdings (SOLF Quote) from neutral to sell and Trina Solar (TSL Quote) to sell from buy. JA Solar remained nearly flat at $15.90, while Yingli Green dropped 11% to $16.90, Solarfun Power shed 13% to $12.18 and Trina Solar dipped 9% to $31.01.

Another Chinese solar name that saw increased selling pressure was LDK Solar (LDK Quote). Analysts expressed concerns about LDK's polysilicon inventory accounting practices on the quarterly conference call Monday. LDK Solar reports its inventory in two ways: material to be used within a year and material slated for beyond one year. LDK's chief financial officer, Jack Laif, defended his firm's accounting practice, but analysts on Wall Street remain confused by the company's accounting standards.