The Hindu Business Line : Downtrend continues

WITH crude prices surging again, the equities at the US markets felt the pressure and eased further. The US stocks fell for a second week in a row. However, Friday's better-than-expected reports on industrial production and wholesale prices helped the benchmarks to cut a part of their weekly losses.

Last week, the S&P 500 lost 0.1 per cent to 1184.52; the Dow Jones Industrial Average fell 0.4 per cent to 10,558.00 and the Nasdaq Composite Index finished little changed at 2087.91.

Despite a good show by Indian Inc, a bout of selling, particularly from foreign institutional investors, kept the domestic bourses in the red for the second consecutive week. The BSE Sensex crumbled by 3.84 per cent at 6173.82 and the NSE's S&P CNX Nifty crashed by over four per cent at 1931.1.

The general negative impact at the bourses seemed to have impacted the Indian ADRs as well as most of them finished in negative territory. In fact, HDFC Bank was the lone counter to finish the week in positive territory. HDFC Bank Ltd had last week announced that its third-quarter profit increased by 32 per cent to Rs 171 crore from Rs 130 crore a year ago. Reports that the Government will announce a new policy for the banking industry early next week also helped in its recovery. According to reports, the Government is likely to permit overseas investors to buy stakes of as much as 74 per cent in non-state Indian banks, up from the current 49 per cent.

ICICI Bank finished marginally lower at $18.54 ($18.6).

Beating market expectations, Infosys Technologies (on consolidated basis) announced that its net profit rose 51 per cent to Rs 497.34 crore (Rs 328.51 crore) on total income of Rs 1,921.92 crore (Rs 1,303.47 crore). But the ADR ended weak at $63.8 against the previous week close of $65.93. Satyam and Wipro closed a tad weak at $22.08 ($22.16) and $21.18 ($21.52) respectively. The former is scheduled to announce its third quarter result this week.

The Government notification that drug companies must pay excise on the maximum retail price of a drug seemed to have affected Dr. Reddy's Lab. The ADR closed weak at $17.49 ($18.38).

Following Tata Motors' announcement that it won orders worth $31 million for 1,420 buses from Karnataka and from Senegal in Africa, the ADR recovered from its weekly low. It closed a shade lower at $11.12 ($11.3). According to Tata Motors, the first shipment of buses to Senegal will be sent in the first week of February and the Karnataka order would be completed by March.

Internet counters, Sify and Rediff displayed a mixed trend with the former gaining marginally at $5.56 (5.53) while the latter declined to $7.63 ($7.69).

On the premium/discount front, Satyam Computer's premium widened to 33.23 per cent against the previous week figure of 25.36 per cent. For the rest, the premium showed a variation albeit of a lesser intensity.

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