Tuesday's Asia ADR Recap

Updated from 5:52 p.m. EDT

Indian 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 Recap

Chinese stocks rose Tuesday after some major blue chips reported strong first-quarter earnings results. Baoshan Steel, China's largest metal maker, posted a 16% increase in first-quarter profits and Tangshan Iron & Steel, the nation's second biggest steelmaker, said first-quarter profits surged 57%. China's third largest bank, Bank of China, reported that net income soared 85% as loan growth offset U.S. subprime mortgage losses.

"First-quarter earnings are almost all out and the economy isn't as weak as investors had feared, which is why some investors are already beginning to bargain-hunt," said Huatai Securities analyst Chen Jinren.

Despite the strong earnings reports, dealers in the region said investor sentiment could be hampered going forward when more than 230 billion yuan ($32.9 billion) non-tradable shares come off of lockup in May.

The Shanghai Composite Index advanced 48 points, or 1.4%, to 3,523 and Hong Kong's Hang Seng Index closed up 247 points, or 1%, at 25,914.

Huaneng Power International ( HNP), a unit of China's largest independent power producer, announced it has bought Tuas Power for around $1 billion to expand its operations into Singapore. The company will pay its parent China Huaneng Group 1.57 billion yuan ($225 million) in cash and finance the remainder of the acquisition through debt. American depositary shares of Huaneng jumped 4.4% to $31.73.

The Hong Kong-listed arm of China's fourth largest coal miner, Yanzhou Coal ( YZC), said first-quarter net profit rose 112.7% to 1.49 billion (213.13 million) due to a sharp rise in the price of coal. The company said it booked a net profit of 1.11 billion yuan in the first half of 2007 and operating revenue jumped 47% to 5.55 billion yuan. Yanzhou forecasted that first-half net profit will rise by more than 100%. Shares of YZC rose by 2% to $91.80.

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.

Stockpickr is a wholly owned subsidiary of TheStreet.com.

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