ADR Shares End Lower, Reversing Fed-Fueled Rally

   By Anna Prior 
 

International companies trading in New York closed mostly lower Friday amid a move by India's central bank to hike a key lending rate.

That reversed the rally that followed the Federal Reserve's decision this week to continue buying $85 billion in bonds every months to stimulate the U.S. economy.

The Bank of New York index of ADRs fell 0.9% to 145.20.

Indian stocks slid after the Reserve Bank of India surprised investors by raising its key lending rate by a quarter percentage point to 7.5%.

Shares of Indian banks were particularly hard hit. ICICI Bank Ltd. (IBN, 532174.BY) fell 4.8% to $32.39, while HDFC Bank Ltd. (HDB, 500180.BY) dropped 4.1% to $32.55.

Meanwhile, some investors headed for the sidelines ahead of the German election over the weekend. Angela Merkel is expected to win a third term as chancellor, but some opinion polls suggest her center-right coalition holds only a slight majority, adding some doubt about the outcome of Sunday's national election.

The European index edged down 0.7% to 139.66.

Financial stocks added to declines, with Germany firm Deutsche Bank AG (DB, DBK.XE) falling 2.4% to $47.69, U.K. firm Royal Bank of Scotland Group PLC (RBS, RBS.LN) down 2.8% to $11.49, Barclays PLC (BCS, BARC.LN) down 2.4% to $17.45, and ING Groep NV (ING, INGA.AE) down 2.2% to $11.54.

The Asian index fell 1.2% to 147.84.

Cantor Fitzgerald started coverage of Taiwan-based LCD panel maker AU Optronics Corp. (AUO, 2409.TW) with a hold rating and $4 price target, saying in a note to clients that "given the sluggish macro environment and the expiration of LCD TV subsidies in China, we expect muted LCD panel trends in the near term." Shares fell 2.1% to $3.81.

JinkoSolar Holding Co. (JKS) said its boosted offering of 3.8 million American depositary shares priced at $16.25 per ADS, a mere 1.4% discount to Thursday's close. The Chinese solar-product maker had said earlier this week that it intended to offer 3.5 million ADSs. Shares rose 5.3% to $17.36.

The Latin American index dropped 1.9% to 295.49 and the emerging markets index tumbled 1.8% to 276.75.

Brazilian stocks also added to declines, with airline Gol Linhas Aereas Inteligentes SA (GOL, GOLL4.BR) down 4.8% to $4.80, petrochemical and utilities generation company Braskem SA (BAK, BRKM5.BR) down 3.1% to $15.87 and pulp and paper producer Fibria Celulose SA (FBR, FIBR3.BR) down 2.7% to $12.05.

Write to Anna Prior at [e-mail]