Stocks in India fell Tuesday after news broke that the Left allies of the ruling United Progressive Alliance (UPA) have withdrawn their political support for the Indian government in protest of the India-U.S. nuclear deal. Despite the bad news, some analysts in the Far East think it could actually be a positive going forward for Indian markets.

“The Left’s exit could actually be a blessing in disguise as without them, the government could go ahead to push privatization and pension reforms, higher foreign limits in insurance and more liberal norms for foreign banks, all of which had been stalled by the Left parties,” said Abheek Baruah, chief economist at HDFC Bank.

HSBC Holdings PLC (HBC) also put pressure on Indian equities Tuesday after the investment bank lowered its December 2008 target for the Sensex Index to 14,000, vs. previous estimates of 17,500, and it cut its year-end 2009 target by 29% to 15,000.

In a note to clients, HSBC Asian strategist, Garry Evans said, “There is risk of the price-earnings multiple contracting in the case of further monetary tightening. Analysts have yet to meaningfully downgrade earnings per share forecasts: this may happen after quarterly results are announced later this month.”

The Bombay Stock Exchange's Sensex Index fell 176 points, or 1.3%, to 13,349.65. Here's a look at how some India-based American depositary shares traded in the U.S. on Tuesday.

Dr. Reddy’s Laboratories (RDY), an India-based pharmaceutical company, announced it has inked a global distribution deal with U.S.-based specialty chemicals company Albemarle (ALB). Under the terms of the deal, Albemarle will supply painkiller and anti-inflammatory drug ibuprofen API from its FDA-inspected Orangeburg plant in South Carolina, U.S., to Dr. Reddy’s for distribution to its global clients. Albemarle also announced it will supply Dr. Reddy’s with a large amount of its ibuprofen API requirements for use in the company’s generic version of ibuprofen. American depositary shares of Dr. Reddy’s, which trade on the NYSE, shot up 3.6% to $15.72.

Standard & Poor’s Rating Services announced it will keep all of its ratings on India’s largest automaker Tata Motors (TTM) including its BB corporate credit rating on negative watch, pending the finalization of Tata’s financing plans for the purchase of luxury auto brands Jaguar and Land Rover from Ford Motor (F).Shares of Tata Motors dropped 1.7% to $8.98.

Ariba (ARBA), a U.S.-based leader in spend management solutions, announced it has signed up India-based information technology services company Wipro (WIT) to become its newest solutions provider program partner. Under the partnership, Wipro will offer Ariba spend management solutions to its enterprise customers around the globe. Shares of Wipro moved down 1.5% to $11.54.

Elsewhere in the Indian technology sector, shares of Sify Technologies (SIFY), jumped 4.8% to $3.25; WNS Holdings (WNS), added 3.4% to $16.30; Patni Computer Systems (PTI), rose 2.8% to $11.38; and Satyam Computer (SAY), slipped lower by 2.3% to $25.22.

Be sure to check out the Far East Portfolio at Stockpickr.comevery night to find out which stocks in India and China are making big moves and announcing major news.

China Recap

Stocks in China traded mixed Tuesday with shares in mainland China advancing slightly on news the government might delay plans to hike taxes on coal and other commodities. Shares in Hong Kong dove sharply after rumors of a government bailout to support the markets ahead of the Olympics produced no such announcements. Traders said that Far East investors are also concerned about the global credit environment after Lehman Brothers issues a report yesterday that said accounting changes might force Fannie Mae (FNM) and Freddie Mac (FRE) to write-down more credit losses.

“After the drop on Wall Street, people are wary about further write-downs related to subprime mortgages,” said Francis Lun, general manager at Fulbright Securities in Hong Kong.

The Shanghai Composite Index added 22.55 points, or 0.81%, to 2,814.85 and Hong Kong’s Hang Seng Index plunged 692.25, or 3.2%, to 21,220.81. Here's a look at how some China-based American depositary shares traded in the U.S. on Tuesday.

Piper Jaffray analysts Gene Munster and Vivian Li issued some bullish comments on China’s top Internet search engine Baidu.com (BIDU). According to their channel checks with Baidu advertisers and ad agencies in China, the June quarter is tracking ahead of Wall Street estimates of $112 million in revenue and 97 cents in EPS, despite worries over the major earthquake that rocked China in May. The analysts said they’re keeping their buy rating and $430 price target on the stock. American depository shares of Baidu, which trade on the Nasdaq, surged 2% to $334.56.

Chinese bio-diesel and bio-diesel by-products producer and distributor Gushan Environment (GU) announced it has terminated its proposed follow-on public offering of American Depositary Shares in the U.S. due to stock market volatility and the current price of its ADSs. Shares of Gushan Environmental Energy lost 2.6% $10.19.

Global Hunter Securities reiterated its buy rating on Chinese media network operator AirMedia Group (AMCN) and raised its price target to $21 from $20, citing two takeovers made yesterday that they feel will be immediately accretive to AirMedia’s earnings. The firm raised its EPADS estimates for 2008 to 54 cents, vs. 53 cents and upped its 2009 EPADS to 91 cents, vs. 85 cents. Shares of AirMedia slipped 3.6% to $13.49.

China Southern Airlines (ZNH) China’s largest airline by fleet size, announced it plans to hike its fuel surcharge on international flights by over 30% as the aviation industry struggles with skyrocketing fuel costs. The company said it will raise the fuel surcharge on certain international flights by 37.5% at 2,200 yuan ($320.70), vs. 1,600 yuan, and for shorter international flights the cost will go up 31% to 1,100 yuan from 840 yuan. The changes to the cost of its fuel surcharge will begin on July 10. Shares of China Southern dipped 1.8% to $19.33.

Leading the list of big movers to the upside among Chinese ADRs and China-based stocks Tuesday were China Digital TV Holding (STV), which soared 10% to $12.25; Xinyuan Real Estate (XIN), which closed up 8.6% to $5.81; Melco Crown Entertainment (MPEL), which shot up 8.4% to $8.21; and E-House China Holdings (EJ),which ripped higher by 8.2% to $10.62.

Be sure to check out the Far East Portfolio at Stockpickr.comevery night to find out which stocks in India and China are making big moves and announcing major news.