The Hindu Business Line : Indian counters witness sharp fall

Thanks to the Government proposal to fund depressed mortgage lenders Fannie Mae and Freddie Mac, the US markets posted a strong recovery. The S&P 500 Index rose 0.8 per cent & the Dow Jones Industrial climbed 1.8 per cent. However, Nasdaq ended with a marginal gain of 0.2 per cent.

Despite positive start due to the Nuclear Supply Group clearance for the nuclear deal, the BSE Sensex and the NSE’s S&P CNX Nifty ended with sharp losses of 3.33 per cent and 2.85 per cent respectively due to heavy selling by FIIs.

Except for Tata Communications, all the other ADRs ended the week on a weak note. Among them, the worst affected were Sify and Rediff.com. While the Sify ADR slumped by 22.5 per cent, the latter dwindled by 15.3 per cent. Both these counters have been gaining in the recent past, and profit taking appeared to have arrested the gains.

Sterlite Industries ADR was the next biggest loser, as the counter tumbled by 15.4 per cent at $11 against the previous week close of $13. Sterlite Industries has been on the declining trend since it announced its restructuring scheme. Under the scheme, Sterlite will de-merge its aluminium and energy businesses to Madras Aluminium. Sterlite Industries shareholders would get seven shares in Madras Aluminium for every four shares held as part of a restructuring that did not go well with market participants.

Among the IT counters, Patni Computer (8.5 per cent) was the biggest loser followed by Infosy Technologies (5.5 per cent), Wipro (5.3 per cent) and Satyam Computer (3.5 per cent). Despite the depreciating rupee, these counters have declined. Reports that sharp and sudden appreciation of the dollar against the pound and euro would hit IT firms’ revenue in dollar terms appeared to have affected the sentiment for these stocks.

Despite softening of inflation figures, ICICI Bank and HDFC Bank slid 5.9 per cent and 3.2 per cent respectively.

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