The Hindu Business Line : Tata Motors, Sterlite suffer

The flagging US economy continued to haunt the US bourses after the country elected Barack Obama as President last week. The S&P 500 lost 3.9 per cent to 930.99 while the Dow Jones Industrial Average retreated 4.1 per cent to 8,943.81 and the tech-focussed Nasdaq Composite Index fell 4.3 per cent to 1,647.4.

Despite volatile trading, the Indian stocks ended the week on a positive note, as foreign institutional investors’ selling abated a little. The BSE Sensex gained 1.8 per cent while the NSE’s S&P CNX Nifty surged by about 3 per cent.

Among the ADRs, Tata Motors was the worst affected as it ADR plummeted by 24.4 per cent at $4.42 against the previous week close of $5.85.

Tata Motors Ltd last week announced that it is closing two of its commercial vehicle plants – Pune and Lucknow units – for six days later this month to avoid inventory build-up. Earlier, it had also announced closure of its commercial vehicle plant in Jamshedpur for three days from November 6.

Sterlite Industries was the big loser; its ADR plunged 20.84 per cent at $4.9 ($6.19). Last week its parent company, Vedanta Resources, announced a weak financial performance. Hit by higher input costs and a slump in demand, Vedanta Resources’s profit fell 9.78 per cent in the first half of this year to $876.4 million forcing the company to slash investments and consider pruning production. The global metals and mining major had reported a profit of $971.5 million in the same period last year.

Bitter Half awaited?

Tata Communications and Infosys Technologies also tumbled 13 per cent and 9 per cent respectively. The other IT counters, however, displayed mixed trend. Satyam Computer fell 2.8 per cent but Wipro gained 1.42 per cent while Patni Computer finished flat. The mixed reaction was despite Nasscom expecting slower growth in the second-half of current fiscal. “We had a very good growth in the first half… the growth rate had been in excess of 24 per cent for the top 10 companies. But the growth rate in the second half of FY09 is likely to be lower compared to the year-ago period. Given the slew of mergers and consolidation overseas, people are reviewing IT budgets,” the Nasscom President, Mr Som Mittal, had said.

Banking majors ICICI Bank and HDFC Bank ended on firm note despite global markets giving thumbs down to financial sector. The former gained 4.91 per cent, the latter witnessed a gain of 0.61 per cent.

More Stories on : Stock Markets | ADR Watch

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
‘Insiders’ take advantage of low stock prices

Tata Motors, Sterlite suffer

Obama or Tata: Who can save the economy?

Oriental Bank (Rs 148.50): Buy

Day Trading Guide

Range-bound movement likely in short term