Wednesday's Asia ADR Recap

Indian stocks reversed from early gains to close down Wednesday after speculation mounted that the central bank will take further action to cut off money supply growth. Dealers said that market players are betting that the central bank may raise the cash reserve ratio as high as 8.75% after it was bumped up to 8.25% yesterday.

"The Reserve Bank is trying to balance both growth and inflation," said N.S. Venkatesh, chief executive officer of IDBI Gilts Ltd.

The Bombay Stock Exchange's benchmark 30-stock Sensex Index declined by 91 points, or 0.5%, to 17,287. Indian equity markets will be closed Thursday due to a public holiday.

Indian information technology (IT) company Patni Computer Systems ( PTI) said first-quarter net profits fell 35% to 724.6 million rupees, vs. 1.2 billion from a year earlier, but revenue jumped 13.1% to 7.06 billion rupees ($176.4 million), vs. Wall Street estimates of $175.6 million. The company forecasted second-quarter net profit to come in between the range of 880 million rupees to 920 million rupees ($22 million to $23 million) on revenue of 7.2 billion rupees to 7.24 billion ($180 million to $181 million), vs. estimates of $181.7 million. Patni said that although results are in line with guidance, it remains cautions on the global economy in 2008. American depositary shares of PTI rose 2.3% to $13.42.

Elsewhere in the Indian IT complex, Tibco Software ( TIBX) announced it has expanded its existing eight-year relationship with Indian global IT provider Infosys Technologies ( INFY). Shares of INFY slipped 0.5% to $43.69.

Mahanagar Telephone Nigam ( MTE), a state-owned telephone service provider announced its fourth-quarter net profit jumped 8% to 2.20 billion rupees, vs. 2.02 billion rupees from a year earlier. Total revenue for the fourth quarter rose 5.3% to 14.64 billion rupees, vs. 13.9 billion rupees from a year ago. Shares of MTE finished essentially flat at $5.57.

Indian drugmaker Dr. Reddy's Laboratories ( RDY) announced it has agreed to acquire German chemical company BASF's pharmaceutical contract manufacturing business in Shreveport, La., for $40 million.

"The acquisition will enable us to strengthen our supply chain for North America and provide a strong platform for pursuing additional growth opportunities," said managing director, Satish Reddy. Shares of RDY closed down 1% at $15.27.

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

Asian stocks traded mixed Wednesday with shares in mainland China rising off strong earnings reports from financial and insurance companies, and shares in Hong Kong losing ground as investors booked gains ahead of the Federal Open Market Committee's (FOMC) interest rate decision.

"I think it's more a matter of caution and people are acting defensively because there's going to be some big news and there is a holiday in most of Asia the next day," said Andrew Sullivan, sales trader at Mainfirst Securities in Hong Kong.

The Shanghai Composite Index rose 169 points, or 4.8%, to 3,693 and Hong Kong's Hang Seng Index closed down 158 points, or 0.6%, to 25,755. The Shanghai markets will be closed on Thursday and Friday for the national May Day holiday and reopen on Monday, while the Hong Kong market will be closed Thursday for Labor Day.

Sohu.com ( SOHU), a leading Chinese Internet company, was downgraded by Oppenheimer from outperform to perform. Analyst Jason Helfstein said the stock is overpriced with shares up 32% on the year and he no longer sees compelling value at current levels.

RBC Capital Markets announced it will keep its outperform rating on Sohu.com and raised its price target from $65 to $80. In research note to clients, RBC said due to guidance above Wall Street expectations its raising EPS estimates for 2008 and 2009 from $2.16 to $2.82 and from $2.82 to $4.12. American depositary shares of SOHU fell 4.2% to $69.13.

Elsewhere in the Chinese Internet sector, Shanda Interactive Entertainment ( SNDA), traded up 1.7% to $34.29; Baidu.com ( BIDU) lost 2.2% to $365.60; and SINA ( SINA), finished essentially flat at $46.20.

Beijing-based fabless semiconductor company Vimicro International ( VIMC) said its first-quarter net loss was $3.2 million, vs. $3.8 million from a year ago, due to seasonal weakness. The company said revenue for the first quarter came in at $16.2 million, vs. $16.9 million and its loss per share was 9 cents per share, vs. a loss of 11 cents per share in the first quarter of 2007. Vimicro forecasted revenue for the second quarter to fall in the range of $22 million to $24 million, vs. Wall Street estimates of $20.87 million.

Following the earnings report, Roth Capital upgraded Vimicro to buy from hold and lowered its price target to $4 from $4.50, citing new products and design wins. Shares of VIMC rose 1.5% to $3.39.

Among the Chinese ADR winners Wednesday were, Harbin Electric ( HRBN), which ripped 12% higher to $15.95; Giant Interactive ( GA), which jumped 11% to $16.28; and Canadian Solar ( CSIQ), which finished up 9% to $27.37.

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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