Hong Kong, Shanghai Indices Rise

India Recap

Shares of India-based equities rose for the sixth consecutive trading session Tuesday as investors bid up stocks in hopes that a global recovery is under way. Dealers in the Far East said they expect stocks to march higher right up until the central bank issues its monetary policy review next week.

Once the review is released, all bets are off, and many analysts expect volatility to return to Bombay as institutional investors look toward interest rate decisions to drive the market's direction.

Comments out of India Finance Minister Palaniappan Chidambaram sparked renewed fears among market players that an interest rate hike will come at the April 29 policy meeting

"More monetary and fiscal measures are under consideration to contain runaway inflation, currently near a three-year high," Chidambaram said.

UBS announced it has lowered its forecast for India's Sensex Index to 19,600, vs. previous estimates of 22,600. "In the near term, we believe the two key concerns of inflation and interest rates staying high are likely to persist,'' said Manishi Raychaudhuri, a analyst at UBS. The Bombay Stock Exchange's benchmark 30-stock Sensex Index eked out a gain of 45 points, or 0.3%, to 16,783.87 points.

Leading Indian information technology firm Satyam Computer(SAY Quote) was downgraded by Stifel Nicolaus from buy to hold due to lower estimates, valuation, cautious management comments, and because the firm believes the current market environment will not produce a catalyst to take shares higher. American depositary shares of SAY fell 8% to $23.27 on above-average daily volume.

Patni Computer(PTI Quote), an Indian information technology and software development company, was downgraded by Bruyette & Woods from buy to hold due to valuation concerns. In a note to clients, said Keefe, investors won't pay a premium for Patni with concerns of a slowing global economic landscape and a possible decrease in corporate IT spending. Keefe still thinks PTI will be a good long-term play, but it remains cautious about Patni's U.S. exposure and customer concentration. Shares of PTI dove 6.2% to $12.55.

Leading Indian ADRs to the downside Tuesday were Rediff.com(REDF Quote), which fell 5.6% to $9.11; Wipro(WIT Quote), which dropped 4% to $11.82; Sify Technologies(SIFY Quote), which slipped 3.5% to $4.73; and WNS(WNS Quote), which traded down by 3.2% to $18.83.

One of the few Indian ADRs to advance Tuesday was mining and metal company Sterlite Industries(SLT Quote), which traded up 1.1% to $20.65. Traders said shares of SLT were rising ahead of the company's earnings report set for April 26 in hopes the firm reports solid numbers.

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 Hong Kong hit an 11-week closing high Tuesday, and shares in mainland China rebounded amid extreme volatility after falling through the psychologically important 3,000 level. Dealers in China said major market players started to bottom-fish below the 3,000 mark, and many sectors saw a technical rebound from overly depressed prices.

"The rebound in the Chinese markets seems to have helped trim losses in Hong Kong, too. Mainland investors are looking for bargains after recent sharp falls. For the near term, people are still hoping that the government will come up with more market-friendly measures like cutting the stamp duty," said Ben Kwong, head of research with KGi Asia.

The Shanghai Composite Index rose 31 points, or 1%, to 3,147.79, and Hong Kong's Hang Seng Index closed higher by 217 points, or 0.9%, to 24,939.15.