The Hindu Business Line : ICICI Bank at peak

DESPITE disappointing economic reports such as payroll figure from the Labour Department and consumer confidence index, which fell to 95.5 in January against 97.1 in December, the US markets sizzled, mostly on positive corporate news. Besides, the smooth election in Iraq also added positive sentiment to the market.

Last week, the S&P's 500 Index gained 2.7 per cent to 1203.03, while the Dow Jones Industrial Average rose 2.8 per cent to 10,716.13. The Nasdaq Composite Index added 2.5 per cent to 2086.66. According to Bloomberg, the benchmarks registered their largest weekly gains since November 5 last year.

For the domestic bourses, several positive factors such as Government's clearance of provident fund entry into equity market and the clearance of National Electricity Policy, hike in FDI cap in telecom sector and upgradation of India's foreign currency by S&P acted as a trigger. On the back of these factors, the BSE Sensex jumped 3.1 per cent while the NSE's S&P CNX Nifty gained 3.3 per cent.

Thanks to strong show by the US bourses, the Indian ADRs also witnessed sharp gains. Except Dr. Reddy's Lab, MTNL and Rediff.com all the counters recorded modest gains. ICICI Bank, in fact, closed at its new 52-week high level at $20.85 against the previous week close of $18.72. Its premium too jumped to 24.17 per cent (17.62 per cent). The upward rate revision by Standard & Poor's on SBI and ICICI Bank seemed to have lifted the latter to new heights at NYSE.

HDFC Bank also inched up to $44.77 ($42).

Among infotech counters, Infosys notched up maximum gains last week at $68.85 ($63.78) while Wipro at $21.96 ($21.46) and Satyam at $24.47 ($23.21) eked out modest gains.

Dr. Reddy's Laboratories dropped to $17.13 ($17.26) after the company announced that its group profit declined for the ninth quarter in 10 as competition hurt sales in the US and research costs increased. The group has posted a net income of Rs 4 crore for the quarter ended December 31, 2004 as compared to Rs 59.20 crore in the quarter ended December 31, 2003.

Similarly, MTNL too fell to $6.95 ($7.11) after it reported a fall in net profit for the third quarter ended December 31, 2004 at Rs 201 crore (Rs 483 crore).

It was mixed trend from Internet counters as Sify inched up to $4.93 ($4.85) while Rediff.com slipped to $6.26 ($6.48).

ICICI Bank apart, ADRs of Infosys and Satyam also saw surge in premium in respect to their underlying equities at 43.86 per cent (36.76 per cent) and 31.58 per cent (27.56 per cent) respectively. For the rest of them, they hovered around the previous week levels.

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ICICI Bank at peak