Updated from 5:52 p.m. EDTIndian stocks hit an eight-week high Tuesday after investors in the Far East cheered the Reserve Bank of India's (RBI) decision to leave interest rates unchanged in its annual credit policy meeting. The RBI, however, asked the nation's lenders to increase reserves to help cool inflation. The Bombay Stock Exchange's benchmark 30-stock Sensex Index rose 363 points, or 2.1%, to 17,379. India's Finance Minster Palaniappan Chidambaram said he would extend the tax holiday for software companies by one year to March 2010 under the Software Technology Parks of India (STPI) plan. Had the original expiration date stayed in effect, top Indian technology companies could have seen a drop in earnings as their tax rates would have risen to a range of 18% to 22% from 12% to 15%. "This is obviously good news for the industry, especially at a time when they are facing problems because of the weakness in the U.S. economy," said Tejas Doshi, head of research at Sushil Finance in Mumbai. American depositary shares and receipts of Indian information technology companies rallied on the news, with Satyam Computer ( SAY) adding 5.6% to $25.37; WNS ( WNS) trading up 4.8% to $18.39; Infosys Technologies ( INFY) advancing 3.8% to $43.90; Cognizant Technology Solutions ( CTSH) jumping 2.9% to $32.12; and Patni Computer Systems finishing up 2.5% to $13.11. Elsewhere in the Indian IT sector, Wipro ( WIT) announced it has formed a strategic worldwide partnership with eService software provider Transversal. The agreements will combine the strengths and expertise of both companies to address customer needs and deliver online solutions for the financial service sector. Shares of Wipro rose 1.8% to $12.93.
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 Eastern Airlines ( CEA), China's third largest carrier, announce it might lose 405 million yuan ($58 million) of sales this year after Chinese aviation regulators stripped some of its routes as a punishment for a pilot strike over a labor dispute. The company has cut flights on six routes in southern China's Yunnan Province since April 26 and suspended all flights on two other routes since May 4. The carrier said it plans to file an appeal with the Civil Aviation Administration of China to get the routes back as soon as possible. Shares of CEA finished essentially flat at $41.90. Chinese enterprise software and online gaming company CDC Corp ( CHINA) reported a fourth-quarter net loss of $91.2 million, or 67 cents a share, vs. a net loss of $2.2 million, or 2 cents a share, from a year earlier, due to a number of one-time expenses. Total revenue for 2007 rose 30% to $402.4 million, vs. $309.5 million in 2006. The company forecasted first-quarter revenue of $98 million, vs. Wall Street estimates of $98.6 million. Shares of CDC fell 7.1% to $3.50. Some big winners among Chinese ADRs Tuesday were Actions Semiconductor ( ACTS), which jumped 5.6% to $3.90; Focus Media ( FMCN), which rose 5.7% to $39; Giant Interactive Group ( GA), which added 4.2% to $14.55l; and China Netcom Group ( CN), which traded up 4.1% to $62.02. 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. For more on Asia, check out Daniel Harrison's coverage at TheStreet.com.