The Hindu Business Line : IT counters see sharp correction

US stocks witnessed a sharp turnaround of fortune, with equities tumbling on concerns over inflation (on the back of surge in commodities prices including copper) that could provoke fresh US Fed rate hike.

Besides, technology majors Dell (below-than-expected Q1 performance) and Cisco (sales forecast) also charged the bear atmosphere. The Dow Jones Industrial Average tumbled 1.7 per cent week-on-week while the S&P 500 dwindled 2.6 per cent and the Nasdaq crashed 4.2 per cent to 2,243.78, its biggest weekly drop since April 2005.

The domestic markets also witnessed selling pressure during the later part of the week partly due to weak signal from the US and partly due to renewed strength attained by Left parties in Assembly elections (which could slow down the reform process).

After hitting a new peak of 12,671.11, the BSE finished the week at 12,285.11 with a marginal loss of 0.69 per cent; the NSE's S&P CNX Nifty also closed lower by 0.37 per cent.

With both the markets witnessing weak trend, Indian ADRs posted sharp declines. Leading the losers' pack were IT counters such as Infosys, Satyam, Wipro, and Patni, as they depend heavily on the US.

Wipro was the biggest loser (7.5 per cent), followed by Satyam (6.38 per cent) and Infosys (6.19 per cent). Patni fell by 4.6 per cent.

Except HDFC Bank, Sify and Rediff.com, all the counters ended the week lower, though Dr Reddy's and MTNL touched new 52-week highs during intra-week trading. HDFC Bank also hit a new year-high at $63.6, but ended at $61.9 ($61.14).

After Wipro, MTNL was the biggest loser, dropping by 7.17 per cent.

On the premium front, Infy, Satyam and Wipro, saw a dip in their premium while HDFC Bank and Dr. Reddy's Lab witnessd a minor increase.

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