The Hindu Business Line : Mixed week for Indian counters

A set of negative news such as slower job growth, drop in an index of service industries and record oil prices, affected the sentiment at the US markets. As a result, the Dow Jones Industrial Average shed 1.4 per cent last week while the S&P 500 lost0.8 per cent and the Nasdaq declined 1.1 per cent; according to Bloomberg data. While S&P 500 and Nasdaq dropped for a second week in three weeks, the Dow registered its third weekly decline in four weeks.

However, nothing seemed to be hurting the domestic markets as both the Bombay Stock Exchange and the National Stock Exchange finished firm note. While the BSE Sensex gained 1.45 per cent, the NSE's S&P CNX Nifty gained 2.4 per cent amid increased FII inflows.

However, it was a mixed week for Indian ADRs. While counters such as Dr. Reddy's Lab, MTNL, Satyam Computer and Wipro ended in positive territory, others such as Infosys, HDFC Bank, ICICI Bank and VSNL ended on weak note.

Banking counters HDFC Bank and ICICI Bank closed lower despite credit rating agency Crisil's report saying that not a single company rated by it defaulted on debt for the first time in 10 years in the first half of the current fiscal; it also said that the business outlook for Indian companies will improve in the second half. However ICICI Bank closed weak at $14.01 ($14.25) and HDFC Bank at $33.24 ($33.55).

After scaling to a new 52-week high at $60.05, Infosys Technologies closed lower at $55.79 ($58.39). However, Wipro and Satyam Computer closed higher at $24.2 ($23.82) and $20.75 ($19.3). Hopes that earnings will beat market expectations seemed to have influenced IT stocks. While Infosys is slated to announce Q2 results on October 12, Wipro is scheduled to release its results on October. 15.

Besides, Wipro Technologies', the global IT services division of Wipro Ltd, announcement that that it has been ranked as a market leader in the META Group's METAspectrum(SM) report for offshore outsourcing further aided the sentiment for Wipro.

Ever since, the Government outlined its intention to merge BSNL with MTNL, more reports started flowing on this count.

One such report was that the Government may sell a 5 per cent stake in BSNL to help facilitate the company's merger with MTNL. Another report said that BSNL is in talks to buy the Government's 26.12 per cent stake in VSNL.

Amidst this, VSNL fell last week $7.49 ($7.60) even as MTNL gained to end firm at $7.31 ($7.15).

On the premium front, only Infosys's premium with respect to the underling spot fell sharply to 49 per cent against previous week's 57.46 per cent. For the rest, there were no changes in their premiums.

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