The Hindu Business Line : Dr Reddy’s, ICICI Bank witness strong gains

Despite a sharp bounce-back of global stocks, the US stocks closed the week on negative note, as fears of bigger losses for banks loom large. While the S&P’s 500 Index lost 1.1 per cent to 1,315.22, the Dow Jones Industrial Average fell 1.2 per cent to 12,216.40. However, the tech-focussed Nasdaq bucked the trend and finished 0.1 per cent higher.

On the other hand, domestic bourses witnessed strong rally on the back of some short-covering. While the BSE Sensex jumped 9.18 per, the S&P CNX Nifty gained 8.05 per cent.

Despite weak US markets, the Indian ADRs preferred to trail the domestic market, as most of them witnessed strong gains.

Among the biggest gainers were: Dr Reddy’s Lab (10.3 per cent), ICICI Bank (10.09 per cent) and HDFC Bank (7.4 per cent).

Fastest pace

It was moderate gains for the IT counters. The Infosys Technologies ADR gained 7 per cent, Wipro 6.4 per cent and Satyam Computer moved up by 4 per cent. However, the other IT major, Patni Computers closed on negative territory.

Reports that the US lost jobs for a third month in March and manufacturing contracted at the fastest pace in five years would add pressure on Indian IT companies, which to a large extant is depended on this market.

It seems that the market has given thumbs down to Tata Motors’ acquisition of Ford’s Jaguar and Land Rover, as it was the only other counter to end the week in negative territory. The ADR closed at $15.79 against the previous week close of $15.85, a drop of 0.37 per cent. Tata Motors announced that it has entered into a definitive agreement with the Ford Motor Company for the purchase of Jaguar and Land Rover, comprising brands, plants and intellectual property rights for a consideration of $2.3 billion. According to analysts, its acquisition could strain its finances, disregarding the company’s confidence that the $2.3 billion deal would prove beneficial in the long-term.

Biggest gainer

However, the biggest gainer of the week was Rediff.com, which was beaten down quite heavily in recent times. The ADR jumped 16 per cent to end at $8.1 ($6.98) while the Internet ADR Sify jumped 10.75 per cent at $4.43 ($4).

With the exception of Wipro, the premium/discount for almost all the counters remained more or less at the previous week’s level.

The Wipro ADR turned to discount of 23 per cent against last week’s premium of 10 per cent, as the Wipro stock on the BSE jumped 20 per cent.

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