The Hindu Business Line : Indian counters end on weak note

Slowing economic growth, along with a rise in monthly unemployment data and a record rate of home foreclosures, spoiled the mood at the US markets. For the week, the S&P 500 decreased 3.2 per cent to 1,242.31. The Dow Jones Industrial Average declined 2.8 per cent to 11,220.96. The Russell 2000 Index of small-company stocks slid 2.8 per cent to 718.85. The tech-focussed Nasdaq witnessed severe fall of 4.7 per cent. According to Bloomberg, the MSCI World Index of developed market stocks sank 5.6 per cent to 1,269.13, its worst weekly performance since July 2002.

Despite falling inflation rate and declining crude prices, the Indian markets also ended on a weak note. The Bombay Stock Exchange Sensex ended the week at 14,483.83, a fall of 80.70 points or 0.55 per cent over last weekend’s close.

The National Stock Exchange’s S&P CNX Nifty slipped by 0.18 per cent to finish the week at 4,352.30 from last weekend’s close of 4,360.

Most of the Indian ADRs declined tracking the US markets.

The ADR of Sterlite Industries was among the biggest losers. It fell 8.5 per cent to $13 against the previous week close of $14.22. The weakening global commodity prices seemed to have affected the sentiment for the counter.

Despite weakening rupee, the Indian IT counters slipped: Infosys ADR declined 4.6 per cent to $39.39 ($41.28), Wipro by 2.6 per cent to $11.28 ($11.58), Patni Computer fell 5.1 per cent to $10.3 ($10.85) and Satyam Computer inched down by 1.7 per cent to $21.89 ($22.26). The Indian rupee weakened 1.7 per cent to 44.66 against the US dollar.

The sharp fall in Nasdaq indices, on the back of fall in semiconductor indices, appeared to have affected the mood for IT conductors. Internet counters Sify and Rediff.com were the worst performers. The former tumbled by 12.2 per cent to $2.58 ($2.94) and the latter fell by 8.6 per cent to $5.62 ($6.15).

The fall in banking counters, was however, marginal. The HDFC Bank ADR declined by 0.1 per cent to $90.42 ($90.49) and ICICI Bank by 0.3 per cent to $31.12 ($31.2). Cooling inflation rate coupled with general buying interest banking counters helped them ward-off the huge sell-off at the US bourses.

Tata Communications ended the week on a positive note. The ADR gained 1.5 per cent at $18.89 ($18.61) though the company has been directed by a global arbitration tribunal to pay $19 million plus interest as damages to a Reliance Communication subsidiary over a cable dispute. However, MTNL ended 4.9 per cent at $4.43 ($4.66).

The prolonged controversy at Singur seemed to have affected Tata Motors, whose ADR declined by 4.9 per cent to $9.38 ($9.86).

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