Tuesday's Asia Stocks Recap

Updated from 5:15 p.m. EST

Stock prices in India dropped sharply for the second day in a row Tuesday on investor fears that subprime-related losses are now showing up at Indian banks. Icici Bank (IBN Quote), India's second-largest bank, announced a $264 million mark-to-market loss from overseas investments. The Bombay Stock Exchange's Sensex Index finished 337.99 points lower, or 2%, to 16,339.89.

"The quantum of the loss comes as a surprise and has unnerved the market and traders. Investors know from experience that such signs are always the tip of the iceberg," said Rajesh Jain, chief executive officer at Pranav Securities.

India's Icici Bank issued a regulatory filing late in the day Tuesday that said it had no material direct or indirect exposure to the U.S. subprime credit crisis. "The widening of credit spreads in the international markets have resulted in a negative mark-to-market impact on the credit derivatives and fixed income investment portfolios of the bank and its overseas banking subsidiaries, while there has been no significant deterioration in actual credit quality of the underlying investments," the company stated in press release. Investors weren't buying the company's denial on Tuesday and shares of Icici Bank, which trade on the NYSE in the U.S., closed down 6.7% at $46.91 on heavier-than-normal volume.

In other news, Tata Communications (TCL Quote) has entered into a partnership with Telsima to introduce WiMax services to 110 cities in India next year. Tata plans to spend around $500 million by 2010 to build out the high-tech network, according to financialexpress.com. Shares of Tata Communications dropped 7.2% to $23.20.

Tata Motors' (TTM Quote) chairman Ratan Tata said that he is still in negotiations with Ford Motor (F Quote) to purchase luxury car brands Jaguar and Land Rover. Lewis Booth, executive vice president of Ford's European divisions, said, "There are no major roadblocks with the deal, and I expect the sale to be completed by the end of the second quarter." Shares of Tata closed down 2.3% to $17.19 and Ford finished down 0.8% at $6.13.

Leading the decliners among Indian ADRs on Tuesday were India ETFs and closed-end management funds like The India Fund (IFN Quote), down 4.3% to $47.13; Morgan Stanley India Investment (IIF Quote), falling 3.77% to $40.32; and Wisdomtree Trust (EPI Quote) losing 2.5% to $23.53.

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

Stocks in China cooled off Tuesday dropping for the first time in three trading sessions on rising volume. The losses in China were led by financial stocks after Ma Weihua, president of China Merchants Bank, said he expects loan growth to slow this year.

Many market participants believe that China's banking regulators will rein in loans in an effort to cool the economy and keep inflation in check. The benchmark Shanghai Composite Index closed down 102.82 points, or 2.3%, to 4,335.42.

Shares in Hong Kong were under pressure Tuesday after Liu Mingkang, chairman of the China Banking Regulatory Commission, told a local newspaper that Chinese mainland banks and insurers currently hold $15.9 billion in subprime-mortgage exposure. The Hang Send Index lost 465.10 points, or 2%, to 23,119.87.

Chinese human resources company 51job (JOBS Quote) reported a 6% rise in fourth-quarter net income and a 24% rise in fourth-quarter total revenue. The company said first-quarter 2008 revenue will fall between $30.2 million or $31.5 million, vs. Wall Street estimates of $30.80 million. Shares of 51job closed down 7.8% to $16.96 on twice the average daily volume.

One Chinese ADR winner Tuesday was alternative energy play Trina Solar (TSL Quote), which posted positive earnings results due to strong demand for their solar-power systems. The company reported its fourth-quarter net income tripled to $16 million and its revenue doubled to $101.4 million from $38.7 million for the prior period. The firm forecasted first-quarter revenue between $112 million and $120 million, vs. Wall Street estimate of $116 million. Shares of TSL were one of the few Chinese ADRs to advance Tuesday. The stock finished up 5.4% at $34.37 on 4 times the average trading volume.