The Hindu Business Line : IT counters resilient

For the second straight week, the US benchmarks gained on the US President, Mr George W. Bush’s plan to avert recession. S&P 500 added 1.6 per cent and the Dow Jones Industrial Average rose 1.9 per cent, while the Nasdaq climbed 1.7 per cent.

Expectation of cut in interest rate by the US Federal Reserve also buoyed the sentiment at the domestic markets. The BSE Sensex jumped 3.11 per cent and the NSE’s Nifty jumped 3.7 per cent.

The India IT ADRs, which were underperforming of late, turned resilient last week.

Patni Computers was the biggest gainer; the ADR jumped 9.3 per cent. It was followed by Satyam Computer (7.5 per cent), Infosys Technologies (6.2 per cent) and Wipro (4.5 per cent).

Hopes that IT stocks would be re-rated as rupee appreciation against dollar has been manageable particularly in the current quarter seemed to have lifted sentiment for these counters.

Apart from IT ADRs, Dr Reddy’s Lab also witnessed sharp recovery; the ADR jumped 8.3 per cent at $17.01 ($15.71).

Banking counters – HDFC Bank and ICICI Bank – also gained 3.16 per cent and 5.4 per cent respectively.

The recently-listed Sterlite Industries also jumped 5.7 per cent at $27.8 ($26.3), while Tata Motors gained by 4.12 per cent at $19.44 ($18.67).

However, telecom counters – MTNL and VSNL – displayed a divergent trend. While the former gained 3.6 per cent at $9.25 ($8.931), the latter slipped by 0.18 per cent at $33.05 ($33.11) on account of profit-taking.

Apart from VSNL, Sify was the other loser as its ADR tumbled by 3.3 per cent at $6.15 ($6.36), though the other Internet ADR Rediff.com gained by 5.8 per cent at $12.5 ($11.81).

Satyam Computer ADR’s premium widened to 24.85 per cent (17.76) per cent while Wipro’s slipped to 18.87 per cent (24.78 per cent). For the other ADRs, the premium/discount almost remained at the previous week’s level.

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