Indian markets sold off Friday as investors reacted negatively to Finance Minister Palaniappan Chidambaram's Union Budget. The budget detailed plans to raise short-term capital gains tax from 10% to 15%.
The hike in the capital gains tax hurt market sentiment for the most active stock traders. However, many market players in the region are hoping that the increase in taxes will cut down on market speculation and encourage longer-term investments.
"Markets are obviously not happy with the capital gains tax," said A. Balasubramaniam, chief investment officer at Birla Sun Life Asset Management Co.
Chidambaram also proposed canceling loans to small farmers worth $15 billion, and he cut excise duties on motorcycles and small cars. He made no cuts to the corporate tax. The benchmark Sensitive Index lost 245.76 points, or 1.4%, to 17,578.72.
responded to the excise duties cuts that came out of the Union Budget. The Indian automaker said it would cut prices for its smaller cars and commercial vehicles. Shares of TTM fell 1.1% to $17.52.
Kandapur Kamath, the CEO of
, appeared on
for an interview with Erin Burnett. Kandapur announced that ICICI Bank is opening up a branch in the U.S. to service some of their its clients. ICICI plans to see how business goes for the first branch and then possibly expand into the retail banking space in the U.S. Shares of IBN closed down 3.7% at $51.84, and rival bank
(HDB - Get Report)
fell 3.6% to $109.11.
Indian Technology ADRs were out of favor with investors Friday. Sharp declines hit the sector in names like
, dropping 6% to $24.98;
, declining 6% to $14.85;
, shedding 5.5% to $8.52; and
, falling 5% to $38.92.
The telecom sector saw one of the few bright spots with
, an Indian ADR, trading up a slight 0.2% to $6.11.
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.
Asian markets traded mixed Friday with the benchmark Shanghai Composite Index finishing up 1.1% at 4,348.54 and the Hang Seng Index dropping 260.02 points, or 1.1% to 24.331.67. Stocks in Hong Kong responded to the weak growth forecast out of the U.S.
U.S. government data showed that growth in the economy ground to a halt for the final quarter of last year. Numbers from the Commerce Department showed a 0.6% rise in gross domestic product for the final three months of 2007, vs. Wall Street expectations of 0.8%.
"People are reacting to bad news from the U.S. and selling for fear that the situation will get worse," said Nancy Lee at Taifook Asset Management Ltd. in Hong Kong.
is getting ready to launch an instant messaging service in a bid to stay ahead of American rival
, according to a
report. The new service will be called Baidu Hi and is currently still under product development. Shares of Baidu closed down 0.7% at $251.33.
China Natural Resources
surged 10% higher after the firm bought a copper smelter based in Inner Mongola. Short-covering propelled the stock to $26.30 on almost 3 times average daily volume.
Another big winner among Chinese ADRs was
China Finance Online
. On Thursday night the online financial data provider posted fourth-quarter net income of $3.63 million, vs. a loss of $0.15 million the previous year. Shares of China Finance rose 24% to $21.22 on heavy volume.