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The Hang Seng Index rebounded from negative territory on Friday to close up 126.75 points, or 0.5%, to 24,148.43. Early morning losses in the region might have been caused by Goldman Sachs cutting its rating for Hong Kong banks from positive to cautious. The Shanghai Index wasn't as lucky closing, down 1.2% to 4,497.13

Investors fear China's central bank will have to increase interest rates, or risk inflation spiraling out of control. Investors are also concerned about the rapid rise in China's money supply, which saw the M2 rise by 18.9% in January, up from 16.7% in December. Consumer prices also rose 6.5% in December, which marked the highest increase in 11 years.

Chinese exports also grew by 26.7% for January up from 21.7% for December. Inflation concerns didn't stop U.S. investors from accumulation shares in

iShares FTSE/Xinhua China 25 Index

(FXI) - Get Free Report

, which traded up 4% Friday on above-average trading volume.

Chinese alternative energy ADRs have been experiencing extremes in volatility all week. That volatility was met with some awesome numbers out of

Yingli Green Energy


on Friday. The Chinese solar-cell maker reported its fourth-quarter profits soared on higher revenue from PV modules.

The firm earned $19 million in the fourth quarter compared with $10.9 million for the fourth quarter in 2006. The earnings excitement was short-lived after YGE guided 2008 revenue below Wall Street estimates. Share of YGE closed down 12% on 3 times the average trading volume. The heavy selling pressure in YGE hit the entire sector across the board with

JA Solar Holdings


falling 8%;

Solarfun Power Holdings

( SOLF) dropping 5%; and

Suntech Power Holdings


declining 4%.

Chinese oil stocks were in high demand on Friday as crude oil prices closed in on $100 a barrel.


(CEO) - Get Free Report

traded up 5%,

China Petroleum & Chemical

(SNP) - Get Free Report

rose 4%,

Sinopec Shanghai Petrochemical

(SHI) - Get Free Report

climbed 4.5% and


(PTR) - Get Free Report

traded up 3%. Rising aluminum and copper prices also helped to take up shares in

Aluminum Corp. Of China

(ACH) - Get Free Report

by 5%.

Make sure to check out the

Far East Portfolio

every night to find out which stocks in India and China are making big moves and announcing major news.

India Recap

Investors continued to find bargains in beaten-down Indian stocks on Friday. The Sensitive Index finished the week on a positive note closing up 348.62 points. or 2%, to 18,115.25. Indian markets were also helped by some positive comments on inflation and growth out of Prime Minister Manmohan Singh at a conference in New Delhi. Sigh assured investors that fighting inflation will continue to be his number one priority.

"I am confident that this year too we will be able to sustain 9% growth and hold the price line at acceptable levels," Singh said. India saw another boast in foreign investor confidence on Friday after the

NYSE Euronext


agreed to buy a 5% stake in the

Multi Commodity Exchange of India

(MCX) for $55 million according to the

Economic Times

. The deal will give NYSE Euronext exposure to the fast-growing and vibrant commodities market in the Far East.

Tata Motors

(TTM) - Get Free Report

has reached an agreement with French inventor Guy Negre to develop an air-powered car. Terms of the agreement weren't disclosed, but the cost of car is expected to be around $5,000, according to Indian brokerage firm Emkay also put out a research report Friday with a buy recommendation for TTM. Shares closed Friday up 1% on light trading.

Mahanagar Telephone Igam


announced plans to roll out its mobile TV service on Friday. The service will be free to customers who have unlimited phone contracts and GPRS-enabled phones. reported the Indian telecommunications provider will look to launch the service on a wider scale in April. Shares of MTE closed down 1%.


(WIT) - Get Free Report

won two large contracts on Friday. The global information technology service firm was awarded a $100 million IT service contract from Saudi Arabian Airlines and a $50 million outsourcing deal with Indian retailer Pantaloon. Shares of Wipro were among the leading decliners among Indian ADRs Friday, falling 2.5%. Noticeable losses were also seen in

Patni Computer Systems

(PTI) - Get Free Report

, down 3%, and

Tata Communications

( TCL), down 2.5%.

Make sure to check out the

Far East Portfolio

every night to find out which stocks in India and China are making big moves and announcing major news.

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