The Hindu Business Line : HDFC Bank, ICICI Bank witness steep fall

While the surging crude oil price and unemployment data affected the US markets, the Indian markets suffered due to firm inflation numbers and exodus of foreign institutional investors.

The Dow Jones Industrial Average fell 3.4 per cent and the Standard and Poor’s 500 Index lost 2.8 per cent. The tech-focussed Nasdaq dropped 1.9 per cent. The BSE Sensex and the NSE’s Nifty tumbled 5.1 per cent and 5 per cent respectively.

Underperforming all these indices, the NYSE Indian ADR Index crashed 6.02 per cent last week, as most of Indian ADRs witnessed sharp fall.

The worst performer was HDFC Bank, whose ADR crashed by 13.2 per cent at $86.58 against the previous week’s close of $99.75. The other banking counter ICICI Bank tumbled 6.04 per cent to $35.45 ($37.73).

Inflation fears

Banking counters have been witnessing selling pressure as the inflation rates soared to undesirable levels.

Fears of hike in short-term interest rates and hike in cash reserve ratio for the banks seemed to have affected the sentiment for these counters.

The overall sentiment affected the information technology counters too that were otherwise moving up on falling rupee.

Among them the worst performers were Satyam Computer, whose ADR tumbled by 7.32 per cent, followed by Wipro (3.11 per cent), Infosys Technologies (3.34 per cent) and Patni Computers fell by 2.88 per cent.

The increase announced by the Government on petroleum products impacted the sentiment for the automobile counter Tata Motors. The ADR crashed by 9.81 per cent to $12.5 ($13.86).

MTNL was the lone survivor of the bear onslaught. The ADR jumped 15.8 per cent to $4.69 ($4.05). The recovery on the counter was mainly due to short covering. The counter was in oversold position.

However, the other telecom major Tata Communications slumped by 8.73 per cent to $22.17 ($24.29).

The fall in LME prices seemed to have affected the sentiment for Sterlite Industries. The ADR witnessed a fall of 9.26 per cent to $20.09 ($22.14).

Dr Reddy’s Lab ADR slipped by 2.7 per cent to $15.83 ($16.27).

Internet counters, Rediff.com and Sify also closed the week in red, with the former falling by 4.9 per cent and the latter by 1.34 per cent.

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