Heavy selling swept through the Indian equities markets on Monday after crude oil spiked higher, driving fears among institutional money managers that corporate profits for the 2008 fiscal year will be eaten way. Market bulls not already on the ropes from a hot inflation number reported on Friday are becoming increasingly concerned that an interest rate hike is inevitable and that crude oil is destined to hit $150 a barrel."Until oil prices start falling and global conditions improve, markets will continue to be under pressure," said Mihir Vora, who is head of equities at HSBC Asset Management. U.S.-based investment banking giant Morgan Stanley ( MS) cut its December 2008 fair value target for India's Sensitive Index by 9% to 13,224, vs. its previous target of 14,450 set in April. In a note to clients, Morgan analyst Ridham Desai said: "The turmoil in global financial markets, coupled with the slowing of growth and resurgence of inflation, has shaken our confidence." The Bombay Stock Exchange's Sensex Index fell 277.97 points, or 1.9%, to 14,293.32. Here's a look at how some India-based American depositary shares traded in the U.S. on Monday. According to CNet.com, Indian information technology major Infosys ( INFY) has developed holographic mobile phones that will be able to project, capture and send 3D images for applications such as 3D films, games, medical scans and education aids. The company said it plans to release the devices by 2010. "Holographic handsets have the capability of enriching the user experience, with an actual 3D experience and higher-quality images. This gives users a more realistic experience in areas like gaming, medicine, movies etc," said an Infosys company representative. American depositary shares of Infosys, which trade on the Nasdaq, traded up 1.5% to $45.
The Indian government has paved the way for the world's third-largest sovereign wealth fund, Government of Singapore Investment Corporation, and Temasek -- another sovereign wealth fund based in Singapore -- to acquire 10% stakes each in India's largest private sector lender ICICI Bank ( IBN). However, the two funds will still need to gain approval from the Reserve Bank of India before they can acquire their stakes. Shares of ICICI Bank dropped 1.2% to $33.12. Patni Computer Systems ( PTI), an Indian information technology, consulting and software development company, announced the launch of a new service called PatniADEPT, which will provide adverse event case processing for pharmaceutical companies. The new service will leverage industry-leading software to provide hosted support for the global collection, coding, assessment and reporting of adverse event data. Shares of Patni climbed 2% to $11.27. Leading the decliners list among Indian ADRs Monday were Sterlite Industries ( SLT), which fell 3.7% to $17.08; Tata Communications ( TCL), which slid lower by 3.6% to $17.74; and Mahanagar Telephone Nigam ( MTE), which traded down 3% to $4.51. 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.
"The market is still in a downward trend and investors are worried that the oil price rise will push up inflation," said Zhang Xiuqi, a market analyst for Guotai Junan Securities. The Shanghai Composite Index slipped 71.32 points, or 2.5%, to 2,760.42. and Hong Kong's Hang Seng Index dropped 30.64 points, or 0.1%, to 22,714.86. Here's a look at how some China-based American depositary shares traded in the U.S. on Monday. According to TradingMarkets.com, China's leading search engine Baidu.com ( BIDU) signed up three large record companies on June 19 to the Baidu Digital Music League. The company has formed partnerships with EEG, Shanghai Huayi Group and Ocean Butterflies Best Hits Karaoke and been granted the copyrights of their MP3, MV and vocal concerts. American depositary shares of Baidu.com, which trade on the Nasdaq, traded off 1.2% to $318.86. Citigroup raised its price target for Chinese Internet media company Sohu.com ( SOHU) from $80 to $90 and upped its 2009 earnings estimates from $3.24 to $3.60, citing strong growth for online gaming, which will drive revenues and earnings in 2009. Citigroup said the stock's drop on Friday was an overreaction to an article from Reuters that said Sohu's online adverting would slow year over year in 2009. The firm said Sohu is one of the best fundamentally positioned names for the next two quarters. Merrill Lynch also defended Sohu and reiterated its buy rating and $95 price target. The company said Sohu has been communicating for a few months that a slowdown in ad growth for 2009 is to be expected. Shares of Sohu surged 5.4% to $75.83 on above-average volume.
Oppenheimer & Company analyst Jason Helfstein upgraded VisionChina Media ( VISN) from perform to outperform and reiterated his $25 price target, citing a positive conversation with ad agency executives and a favorable risk/reward for the stock after the recent selloff. Shares of VisionChina jumped 10% to $17.44. Piper Jaffray lowered its price target for Spreadtrum Communications ( SPRD), a Chinese fables semiconductor company, from $16 to $11 and lowered its EPS estimates from 50 cents to 38 cents for 2008 and from $1.01 to 73 cents for 2009. The firm kept its buy rating on the stock and said inflation concerns in China spurred by the recent energy price hikes could make near-term sell-through trends challenging, and they see much lower September quarter seasonal growth. Shares of Spreadtrum fell 10% to $4.75. Among the Chinese ADRs and China-based stocks that lead the movers to the upside on Monday were Uranium Participation ( U), which jumped 5.8% to $9.05; The9 Limited ( NCTY), which advanced 5.3% to $23.26; LDK Solar ( LDK), which added 4.8% to $39.31; and CNOOC ( CEO), which moved up 4.7% to $166.33. 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.