Wednesday's Asia Stocks Recap
Updated from 5:45 p.m. EDT
Markets in India opened higher Wednesday but couldn't hold on to gains after the release of disappointing industrial production numbers. India's industrial production growth came in at 5.3% year on year for January, vs. 11.6% for January of last year.
"The market is jittery because you are seeing a slowdown in growth on supply constraints and suddenly things are not as rosy as they were six months ago," said R. Balakrishnan, executive director at Mumbai-based Centrum Broking. The Bombay Stock Exchange's Sensex Index finished flat at 16,127.98.
In the technology sector, Indian IT company Patni Computer Systems (PTI) announced plans to aggressively pursue sales in the Asia Pacific region to hedge against a slowdown in America, according to finanicalexpress.com."Patni, which gets more than three quarters of its revenue from the United States, expects 9 percent of its revenue to come from Asia-Pacific, including Japan, in three years from 5 percent now," said Asian regional head Deepak Khosla. ADR shares of PTI closed up 1.7% to $10.65. Indian telecommunications company Tata Communications (TCL) its expansion plans for the next three years. The company didn't provide specifics on how it plans to raise the $1 billion, but some market participants speculated that the firm will sell a stake or make a qualified institutional placement of shares. ADR shares of TCL closed flat up 0.8% at $25. The Indian technology sector came under pressure Wednesday with Satyam Computer (SAY), plunging 9% to $21.57; Infosys Technologies (INFY), falling 4% to $35.33; and Cognizant Technology (CTSH), finishing down 2% at $28.86. 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 RecapStocks in Hong Kong advanced Wednesday after the Federal Reserve said it will pump $200 billion into the U.S. financial system to provide liquidity to banks and attempt to fight off a recession. The Fed hopes the cash injection will motivate banks to lend more money and help ease the pain of the credit crisis. "The market got a boost from the Fed fund injection, but the upside momentum was not very strong as investors are still worried about the market outlook," said Conita Hung, research head at Delta-Asia Securities. Hong Kong's Hang Seng index closed up 427.41 points, or 1.9%, at 23,422.76. Stocks in China weren't so lucky, with the benchmark Shanghai Composite Index losing 95.76 points points, or 2.3%, to 4070.12 after opening initally higher. Investors on the mainland continue to hold back from buying equities on concerns that the Chinese government is set to raise interest rates in order to fight rising inflation. "Chinese investors used the early rise as a chance to sell stocks, partly because expectations for further monetary tightening are quite strong after Tuesday's news that China's February inflation jumped to a fresh 11-year high," said Wu Binghua, strategist at Debon Securities in Shanghai. Chinese multiplatform marketing company Acorn International (ATV) ripped higher by 18% after the company reported a 33% rise in year-on-year net revenue and 379% increase in year-on-year net income. The company also forecasted 2008 net revenue to come in between $280 million and $320 million, vs. Wall Street estimates of $294 million. ADR shares of ATV closed up $1.42 to $8.91. Another huge winner among the Chinese ADRs Wednesday was China Digital TV Holding (STV). Shares of the conditional access systems provider soared 28% after the company announced a deal with Intel (INTC) to develop advanced TV services and products for the Chinese market. ADR shares of STV advanced $4.70 to $21.26 on the news.
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