The Hindu Business Line : Tech counters slip after Infy nos

For a sixth straight week, the US stocks fell sharply on fears that Fannie Mae and Freddie Mac won’t survive the mortgage crisis. The S&P 500 fell 1.9 per cent and the Dow Jones Industrial Average declined 1.7 per cent. On the other hand, the domestic markets were volatile but ended on positive note.

It was mixed trend for the Indian ADRs. Among them, information technology counters witnessed sharp fall after Infosys Technologies came out with its first quarter number and guidance for the entire year. A weaker rupee and a tax reversal helped Infosys Technologies report better-than-expected 21 per cent growth in its fiscal first-quarter net profit.

Infosys raised its earnings and revenue forecast in rupee terms for the current financial year, helped by the weak rupee. But the share price fell because the company didn’t raise its annual revenue guidance in dollars, raising concerns that it may get fewer orders because of an economic slowdown in the US.

Infosys ADR tumbled 10 per cent to $38.14 from the previous week close of $42.6. Satyam Computer tumbled by 6.2 per cent at $23.07 ($24.6) and Wipro by 5.2 per cent at $11.03 ($11.64). However, the Patni Computers ADR finished firm at $11.05 ($10.25), as the company’s buyback plan began on July 10. The buyback offer would close on February 6, 2009 or when the maximum limit of Rs 237 crore is exhausted or the maximum number of shares that can be bought back is reached, whichever is earlier, the company said in a filing to the Bombay Stock Exchange. Patni Computer however, does not intend to buy back its American Depository Receipts, representing its underlying equity shares as part of this offer.

The other bigger gainers during the last week are Tata Communications (6.85 per cent), Tata Motors (5.3 per cent) and Sterlite Industries (2.8 per cent). Sterlite Industries announced that it entered into a deal with the unions representing the workers of Asarco LLC, in which Sterlite plans to substantially acquire all assets. The agreement is on the terms of the collective bargaining that would go into effect once the proposed acquisition is approved by the bankruptcy court overseeing Asarco’s chapter 11 case.

HDFC Bank and ICICI Bank fell but marginally. While the former declined 0.12 per cent at $71.17 ($71.26), the latter by 1.91 per cent to $26.61 ($27.13).

Rediff.com was the worst performer whose ADR plummeted by 18.3 per cent at $5.4 ($6.61). Sify, however, finished firm at $3.1699 ($3.16).

The ADR of Dr. Reddy’s Lab also saw a fall of 2.68 per cent at $15.25 ($15.67). The pharma major last week announced that it signed an agreement with US-based Albemarle Corporation for Ibuprofen active pharmaceutical ingredient. According to the agreement, Albemarle will supply Ibuprofen active pharmaceutical ingredient to Dr Reddy’s Laboratories for distribution to its global client base. Ibuprofen is used for management of pain and its market size is estimated at $2.24 billion globally.

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