Update from 4:04 p.m. EST

Indian stock markets saw a severe drop Monday after the annual budget presented by Palaniappan Chidambaram on Feb. 29 failed to spur buying interest. Market players in India are also concerned about slowing U.S. growth and a possible U.S. recession impacting their economy. The Sensitive Index plunged 900.84 points, or 5.1%, to 16,677.88.

"There is blood on the street. The data coming out of the U.S. is very weak and the budget also did not inspire confidence. All this has led to a selloff," said Jayesh Shroff, from SBI Funds Management.

According to a Reuters report, India's Tata Communications ( TCL) might sell a stake in its retail and broadband business to Singapore state investment company Temasek Holdings. Shares of Tata Communications fell 0.8% to end the session at $25 and were recently trading another 0.8% lower in after-hours trading on the NYSE.

Some big losers among Indian ADRs Monday were Sterlite Industries ( SLT), which closed 4.6% down at $19.90; Mahanagar Telephone Ingam ( MTE), down 5.4% at $5.78; and Patni Computer Systems ( PTI), down 5.3% to $11.47.

In the banking sector, Icici Securities, the brokerage division of Icici Bank ( IBN), announced plans to sell 3% of its equity to institutional investors ahead of its initial public offering, according to the Mint, a business newspaper. Icici Bank also plans to sell 7% of its equity stake in Icici Securities to the public. Shares of IBN fell 3% to $50.28 and rival bank HDFC Bank ( HDB) fell 5% to $103.69.

Leading the gainers among the Indian ADRs were Tata Motors ( TTM), up 0.5% at $17.60; Dr. Reddy's Laboratories ( RDY), up 1.4% at $14.512 (but losing 1.1% in recent after-hours trading); and WNS Holdings ( WNS), down 1.1% at $14.69.

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 plunged Monday ahead of the annual session of the Chinese People's Political Consultative Conference. Investors in Hong Kong are increasingly worried that the U.S. will slip into a recession due to high oil prices, weak consumer spending and contracting earnings. The Hang Seng Index dropped 746.70 points, or 3.1%, to 23,584.97.

"The market is news-driven and sentiment-oriented. Ongoing concerns in the U.S. have been the reason for the wide and wild fluctuations in the Hang Seng index in the last several weeks,' said Peter Lai, investment manager at DBS Vickers.

Stocks in China bucked the downtrend Monday after Chinese regulators approved the creation of three new mutual funds. Market participants are hoping that more mutual funds will add liquidity to the market and buy up shares of new initial public offerings and as well as stocks coming out of lockup restrictions soon will begin to flood the markets. The benchmark Shanghai Composite Index advanced 89.72 points, or 2.1%, to 4438.27.

"The demand for equities will recover as we'll have more funds to buy them," said Yan Ji, an investment manager at HSBC Jintrust Fund Management Co.

China's top oil and gas producer PetroChina ( PTR) announced plans to build a refinery in Huludao in the Liaoning province in northeastern China, according to Beijing News. The new refinery will have a production capacity of 10 million tons.

Shares of PTR fell 1.6% to $144.44 along with other sector names on the move. Cnooc ( CEO) traded down 2% to $162.50; Sinopec Shanghai Petrochemical ( SHI) rose 0.6% to $46.86; and China Petroleum & Chemical ( SNP) fell 0.1% to $109.30

China's leading Independent insurance company CNinsure ( CISG) announced plans to take a 60% stake in Liaoning Gena Insurance Agency. CNinsure also signed an exclusive distribution agreement with Ping An Life Insurance Co of China, according to insurancenewsnet.com. Shares of CNinsure rose 3.8% to $13.18.

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