Monday's Asia Stocks Recap

Updated from 7:00 p.m. EDT

Echoes of "Black Monday" were heard in India after stock market bears pushed the Bombay Stock Exchange Sensitive Index lower by 950 points, or 6%, to 14,809.49 -- its second biggest single-day decline. India's major stock index slid below the 15,000 level for the first time since Aug. 29, 2007, as market players digested the Bear Stearns (BSC Quote) debacle and the Federal Reserve's emergency cut to the discount rate by a quarter percentage point to 3.25%.

"Indian stock markets are taking cues from the U.S. and Asian markets, even though the subprime mortgage crisis has only moderately affected flow of funds into the country," said Finance Minster Palaniappan Chidambaram.

Indian stocks weren't helped by a plea to global investors from Credit Suisse analysts Nilesh Jasani and Arya Sen to stay underweight India. The analysts said in a note to clients, "Fundamental growth is linked to the world events. The links are less due to trade which is well recognized but they are quite strong due to funding gaps and commodity dependence."

Indian bank ADRs like Icici Bank (IBN Quote) and HDFC Bank (HDB Quote) were the victims of relentless selling Monday. Far East investors are worried that the subprime crisis and exposure to risky market derivatives could continue to batter shares of Indian banks.

"Banking shares collapsed on Bear Stearns news and investors are not able to gauge whether the credit crisis is nearing an end or it is a new beginning of the problems," said Trinadh Kiran, at New Delhi-based Unicon Investment Solutions.

Some analysts believe the exposure of Indian banks to the credit crisis is overblown by the media, but investors are dumping shares and asking questions later. ADR shares of Icici plummeted 12% to $35.16, and shares of HDFC declined 7% to $88.06.

Indian communication companies were some of the few stocks to close in the green Monday. ADR shares of Mahanagar Telephone Nigam (MTE Quote) finished up 1% at $4.85, and Tata Communications (TCL Quote) closed up 1.5% to $23.50.

Indian ADRs that were among the big losers were Rediff.com India (REDF Quote), losing 6% to $6.65; Satyam Computer (SAY Quote), closing off 5% at $20.94; and Sterlite Industries India (SLT Quote), trading off 3.6% to $18.26.

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

Asian markets plunged Monday on news that Wall Street's firth largest investment bank, Bear Stearns, would have to sell the company for a fire-sale price of $2 a share to JPMorgan Chase (JPM Quote), or face bankruptcy from a liquidity crunch.

Investors in the China took the Bear Stearns news hard as market players fear the subprime crisis is far from over and could eventually hit some of their financial institutions.

"It's very much like a black hole. We don't know what more is out there, or the extent of the damage. It's scary and depressing," said Patrick Chang, who helps manage $4.5 billion at CIMB-Principal Asset Management in Kuala Lumpur. China's Shanghai Composite Index shed 142.63 points, or 3.6%, to 3,820.05, and Hong Kong's Hang Seng Index crashed 1,152.50 points, or 5.2%, to 21,084.61.