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Updated from 5:10 p.m. EDT

Indian stocks finished lower Monday after recovering more than 500 points from the lows in an extremely volatile trading session. Shares in the region were down sharply at the open but staged a late comeback led by the banks, metal and oil and gas sectors.

The Bombay Stock Exchange's Sensex Index finished marginally lower by 51 points, or 0.3%, at 15.923.72.

A report out of

The Wall Street Journal

Monday stated that India isn't going to be creating a sovereign-wealth fund anytime soon because of political disagreements and economic concerns. "Creating any kind of stabilization fund may not be justified, given the lack of a dominant exportable natural resource and consistent current account deficits," said the Reserve Bank of India Governor Y.V. Reddy.

Falling sharply on the news were the Indian closed-end management funds like

Morgan Stanley India Investment Fund

(IIF) - Get Morgan Stanley India Investment Fund Inc. Report

, trading off 9% to $34.55, and

The India Fund

(IFN) - Get The India Fund Inc. Report

, dropping 11% to $40.15. Newly launched Indian ETF

WisdomTree India Earnings Fund

(EPI) - Get WisdomTree India Earnings Fund Report

avoided any serious selling pressure, closing off 2% at $22.25.

TheStreet Recommends

Indian pharmaceutical company

Dr. Reddy's Laboratories

(RDY) - Get Dr. Reddy's Laboratories Ltd. Report

announced it has entered into an agreement with Denmark-based

7TM Pharma

to develop drugs to fight metabolic disorders like obesity and diabetes. The agreement will put both firms together to identify clinical drug candidates and develop these candidates from pre-clinical stage to phase II, according to a Dr Reddy's filing with the Bombay Stock Exchange. ADR shares of Dr. Reddy's fell 1.8% to $13.75.

Leading Indian banking giant


(HDB) - Get HDFC Bank Ltd. Report

announced as part of its plans to expand its global presence, the bank will look to open up branches in both Canada and Singapore. HDFC plans to raise $1 billion from overseas markets to finance the global expansion, according to


Rival Indian bank and second largest by assets

Icici Bank

(IBN) - Get ICICI Bank Ltd. Report

announced Monday it has opened up a New York branch in Midtown Manhattan. ADR shares of HDFC Bank fell 2% to $93.49, and Icici Bank declined 4.3% to $41.28.

Leading the decliners among Indian ADRs were


(WIT) - Get Wipro Ltd. Report

, trading off 4% to $10.28;

Sify Technologies

(SIFY) - Get Sify Technologies Ltd. Report

, falling 4% to $4.22; and

Satyam Computer


, declining 3% to $22.67.

Be sure to check out the

Far East Portfolio

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

China Recap

Stocks in China fell sharply Monday on elevated fears of rising inflation and on concerns the U.S. is slipping into a recession. Investors in the Far East are growing worried about the state of the U.S. economy, after the Labor Department announced a loss of 63,000 jobs for February. The drop in employment, which was reported on Friday, was the largest fall since March 2003.

The benchmark Shanghai Composite Index fell 152.22 points, or 3.6%, to 4,146.30.

Stocks in Hong Kong rebounded late in the trading day Monday to close higher. The late session rally was sparked by buying of defensive sectors that will act as safe havens in the case of a U.S. recession.

"Money remains in the market and has switched to defensive stocks, such as utilities,'' said Steven Leung, director of institutional sales at UOB-Kay Hian Ltd. The Hong Kong's Hang Seng index rose 203.72 points, or 0.9%, to 22,705.05.

Chinese specialty pharmaceutical company

Tongjitang Chinese Medicines


exploded 33% higher after the firm received a buyout offer from Chairman and Chief Executive Officer Xiaochun Wang and Director Yongcun Chen. The deal would pay $10.20 per ADR share and take the company private. ADR shares of Tongjitang Chinese Medicines closed at $8.86.

Chinese alternative energy firm

Trina Solar


said it signed a $49 million contract with

GT Solar

for primary and converter and reactor systems. The deal will give Trina the materials and systems it needs for their planned polysilicon production project. ADR shares of TSL fell 10% to $28.

Elsewhere in the Chinese alternative sector,

Yingli Green Energy Holdings


traded off 13% to $13.28;

LDK Solar


lost 10% to $20.15;

JA Solar Holdings


declined 11% to $12.39; and

Solarfun Power Holdings


fell 11% to $8.97.

Chinese media company

Xinhua Finance Media


announced its board of directors has approved a 50 million share buyback plan. Xinhua also said a lawsuit brought by an investor in its U.S. initial public offering is "without merit." ADR shares of XFML plunged 20% to $2.53.

Some of the few stocks to advance among the Chinese ADRs on Monday were

China Medical Tech


, trading up 3.3% to $37.87;

Simcere Pharmaceutical Group


, advancing 2% to $11.22; and

Melco PBL Entertainment


, climbed 2.4% to $11.93.

Be sure to check out the

Far East Portfolio

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

For more on Asia, check out

Daniel Harrison's coverage



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