Stocks in India closed on a sour note on Friday after government data showed that inflation jumped to a seven-year high due to runaway energy prices and soaring food prices. Annual inflation, which is measured by India's Wholesale Price Index, rose 8.75% for the week ending on May 31, vs. 8.24% in the previous week. Analysts in the Far East now fear that another rate hike is in the cards when the Indian Central Bank meets next month.

"We expect the Reserve Bank to raise the repurchase rate by a further 25 basis points in the next policy meeting,'' said Tushar Poddar, an economist at Goldman Sachs Group in Mumbai. "We also expect a further 50 basis points increase in the cash reserve ratio in the remaining of 2008."

The Bombay Stock Exchange's Sensex Index lost 60.58 points, or 0.40%, to 15,189.62. Here's a look at how some India-based American depositary shares traded in the U.S. on Friday.

India's second-largest pharmaceutical manufacturer, Dr. Reddy's ( RDY), announced the launch of the Dr. Reddy's Laboratories Generics Company Intelligence Report. The new reports will help investors understand the complex issues surrounding Dr. Reddy's in the generic drug market. Some of the topics covered in the reports will be quarterly and annual financial results, information on the company's products and drug approvals, M&A activity, strategic alliances and litigation. American depositary shares of Dr. Reddy's, which trade on the NYSE, rose 1.2% to $16.68.

Elsewhere in the Indian drug sector, U.S.-based pharmaceutical giant Pfizer ( PFE) is rumored to be considering a hostile takeover offer for Ranbaxy Laboratories, India's largest drug maker, according to the Business Standard newspaper. Pfizer is reportedly considering an offer to buy 65% of Ranbaxy stock that isn't held by the Singh family, which would counter Japanese drugmaker Daiichi Sankyo's agreed takeover price of $4.6 billion for a 50.1% stake. Shares of Pfizer moved up 1.4% to $17.99, and shares of Ranbaxy jumped 4.3% in India.

Some leading gainers among Indian ADRs Friday were ICICI Bank ( IBN), which rose 3.8% to $36.65; Mahanagar Telephone Nigam ( MTE), which added 3.2% to $4.48; Wipro Limited ( WIP); which traded up 2.1% to $13.53; and Satyam Computer ( SAY), which climbed 2% to $27.30.

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 mainland China continued to sink Friday after the Chinese government failed to announce any measures to rescue the plunging stock market. Market players in the region were calling for the government to ask fund managers to buy shares, but those requests were not met.

"The market is just short of funds. Individual investors have panicked and they're busy selling," said Zhang Xiuqi, an analyst at Guotai Jun'an Securities in Shanghai. "So far, it's hard to see any bottom to this market. I don't see any signs of a rebound."

Shares in Hong Kong were driven lower on Friday, led by local property developers on speculation that local banks will hike mortgage rates. Traders cited comments out of Hang Seng Bank vice-chairman Raymond Or, who told the Standard newspaper that a mortgage rate hike could happen in a few days if the interbank rate does not fall.

The Shanghai Composite Index dropped 88.73 points, or 3%, to 2,868.80, and Hong Kong's Hang Seng Index dove 431.56 points, or 1.9%, to 22,592.30. Here's a look at how some China-based American depositary shares traded in the U.S. on Friday.

Shares of Chinese online game provider and operator Perfect World ( PWRD) surged 14% after the company raised its second-quarter sales guidance, citing better-than-expected results from new expansion packs and recent marketing campaigns. The company said second-quarter revenues will come in between 333 million yuan ($48.3 million) and 348 million yuan ($50.5 million), vs. Wall Street estimates of $44.2 million. American depositary shares of Perfect World, which trade on the Nasdaq, ripped higher by $3.26 to $25.15 on over three times the average daily volume.

The strong guidance out of Perfect World helped boost a few other Chinese online gaming stocks. Shares of NetEase.com ( NTES) soared 9.2% to $22.99, Shanda Interactive ( SNDA) surged 6.3% to $30.06, and Giant Interactive ( GA) roared higher by 5.4% to $13.34.

Origin Agritech ( SEED), a leading technology-focused supplier of crop seed and agri-biotech research in China, announced it has approval of three new corn hybrid varieties and one new genetically-modified cotton variety for distribution in five Chinese provinces during the 2009 sales season. Shares of Origin soared 11% to $6.81 on four times the average daily volume.

New Oriental Education & Technology Group ( EDU), a Chinese provider of private educational services, announced it has inked a deal with U.S.-based Coca-Cola ( KO) to develop an e-learning platform offering vocational training to Coca-Cola system employees in China. Under the terms of the deal, both companies will jointly develop training modules that will use New Oriental's Koolearn online platform. Shares of New Oriental added 4.7% to $65.21.

Chinese alternative energy company LDK Solar ( LDK), announced it has inked a five-year contract with China-based Jiangxi Solar PV to supply multicrystalline solar wafers. Under the terms of the deal, LDK will supply 70 megawatts to JSPV starting in 2009, through 2013. Shares of LDK Solar climbed 7% to $38.20.

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.
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