Financial Daily from THE HINDU group of publications
Monday, Jun 28, 2004
Financial Daily from THE HINDU group of publications Monday, Jun 28, 2004 |
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Markets
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Commentary Columns - ADR Watch IT, telecommunication counters sparkle K.S. Badri Narayanan
THE US markets were mixed last week ahead of this week's crucial Federal Reserve meeting. While the Dow average declined 0.4 per cent to 10,371.84 and the S&P-500 slipped 0.1 per cent to 1134.43, the tech-focused Nasdaq Composite Index jumped two per cent. Indian bourses which began on a negative note, however, recovered towards the later part of the week. The BSE Sensex fell 0.29 per cent to end at 4756.39 and the NSE's S&P CNX Nifty 0.17 per cent at 1488.60. Among the ADRs, infotech and telecommunication counters witnessed a strong rally. On the other hand, Dr. Reddy's Lab and the banking counters - ICICI Bank and HDFC Bank - dropped. Dr. Reddy's Lab, in fact, touched its new 52-week low at $16.7315 but closed the week at $17.07 ($18). Pharma counters have been witnessing selling pressure ever since foreign brokerage CLSA downgraded them citing intense competition and pressure on margins on the generic business. Reports in the New York Times that Microsoft Corp has been using Indian contract software engineers, particularly from Infosys and Satyam, appeared to have triggered a tech rally. Indian ADRs not only witnessed significant gains but also widened their premiums to its underlying equities. Infosys, which zoomed to $93.72 ($87.95), widened its premium to 56.82 per cent (52.58 per cent); Satyam jumped to $18.90 ($17.56) and Wipro to $46.9 ($44.70). Satyam's premium jumped to 41.08 per cent (36.48 per cent). Reports that the Indian Government may buy back the shares of MTNL before merging it with BSNL seemed to have induced positive sentiment towards the counter. Despite announcing a fall in fourth quarter profits, VSNL finished the week firm at $7.10 ($6.67).
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