The Hindu Business Line : Infotech counters bounce back

THANKS to General Motors (on billionaire Kirk Kerkorian hiking stake) and insurance majors such as MetLife Inc and Aon Corp, the US stocks posted their biggest rally since February 4. Benchmarks also got a boost from a government report that showed employers added more workers than forecast last month.The S&P's 500 moved up 1.3 per cent to 1171.35 for the week, the Dow Jones Industrial Average added 1.5 per cent to 10,345.40 and the Nasdaq Composite Index climbed 2.4 per cent to 1967.35.

For the Indian equities, heavy buying by domestic institutions helped in recovery. The BSE Sensex and the NSE's S&P CNX Nifty gained 3.8 per cent at 6388.48 and 1977.50 respectively.

It was one of the best weeks in recent times for the Indian ADRs, as the bullish trend at the bourses imparted a positive impact on them. Except for HDFC Bank and Rediff.com, others finished on firm note.

The US Fed's comment, after hiking the interest rate by 25 basis points to 3 per cent, that its intention to make future increases at a "measured" pace as inflation is "well-contained" seemed to have acted as trigger for the Indian infotech companies. The US is the major market for the Indian IT majors.

Infosys ADR ended on a firm note at $62.6 against the previous week close at $59.2, while Satyam Computer closed at $22.98 ($21.45) and Wipro at $19.21 ($18.47).

Infosys Technologies, meanwhile, informed the exchanges that it is pursuing its secondary ADR offering. The offer opens on May 9 and the closing date is May 19.

It was a mixed week for the banking counters - HDFC Bank closed weak at $43.13 ($43.41) while ICICI Bank ended firm at $19.45 (18.08). Last week, the Indian Government gave approval to two measures that would give the Reserve Bank of India powers to revise SLR and CRR limits of commercial banks. The RBI also raised the ceiling on bank dividend payout ratio to 40 per cent from 33.33 per cent. Dr. Reddy's Lab was volatile. It touched its 52-week low at $14.91 but rose to hit a high of $16.06 during intra-week. However, the company's weak financial performance, announced on Friday after the Indian market time, seemed to have affected the ADR. It closed at $15.7 against the previous week close of $15.16.

VSNL finished firm at $9.65 (9.35) after the long-distance phone company said it receivedfinal US regulatory approvals for its purchase of Tyco International Ltd's global undersea cable network.

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