The Hindu Business Line : Infosys Technologies jumps 7% on falling rupee

The US stocks maintained their momentum last week despite consumer sentiment about the economy dropping to a 28-year low amid surging gasoline prices, falling home prices and a weakening job market. The Dow Jones industrial average gained 1.9 per cent, while the Standard & Poor’s 500 Index advanced 2.7 per cent and the tech-focussed Nasdaq Composite Index climbed 3.4 per cent.

Apart from positive global sentiment, FIIs’ net buying and the absence of major negative news lifted the sentiment for the domestic markets. The BSE Sensex climbed 4.17 per cent and NSE’s S&P CNX Nifty 3.51 per cent.

It was IT stocks that stole the limelight during the last week as the rupee tumbled sharply against the dollar. Indian IT companies depend mainly on exports to the US for revenues. The rupee’s persistent rise over the year had hit the books of these companies severely. Having appreciated pretty much against a soft dollar since August 2006, the tide has turned for the rupee, with the Indian currency falling by more than seven per cent since its closing high in early February this year at 39.4. It now rules around Rs 42.5.

Thanks to the falling rupee, Infosys Technologies jumped 7.2 per cent to end the week at $46.01 against the previous week’s close of $42.91.

While Patni Computers jumped 5.2 per cent, Wipro moved up by 2.15 per cent and Satyam Computer gained 1.5 per cent.

Satyam Computer has lost an appeal at the Court of Appeal in the US which upheld a previous High Court order, barring the Indian IT firm’s moves to block the online mobile payment company Upaid’s fraud and forgery claims against it in Texas, US. The ruling allows Upaid’s lawsuit against Satyam alleging misrepresentation, forgery, fraud and breach of contract to proceed for a US trial by jury in Texas Federal Court.

Sterlite Industries was the other biggest gainer; the ADR jumped 6.96 per cent at $21.82 ($20.4) on the back of firm metal price at LME.

Despite climbing inflation figures, ADRs of ICICI Bank and HDFC Bank were able to finish the week with a gain of 4.6 per cent and 1.1 per cent respectively.

Telecom majors MTNL and Tata Communications closed the week with moderate gains; Tata Motors also ended the week with minor gains.

Only Dr. Reddy’s Lab and Rediff.com finished the week in the red. Dr Reddys Laboratories is scheduled to announce the audited financial results for the year ended March 31, 2008 on May 20.

There was not much deviation on premium/discount front for most of the ADRs. However, Wipro ADR’s premium widened to 11.62 per cent against the previous week premium of 7.85 per cent.

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