The Hindu Business Line : Most Indian counters rule near October lows in US markets

The US stocks fell for the second week following insipid profit outlook from majors including Goldman Sachs and Best Buy. The volatile week saw S&P-500 ending 6.2 per cent lower at 873.29 and the Dow Jones Industrial Average sliding 5 per cent. The Nasdaq Composite Index fell 7.9 per cent while the Russell 2000 plummeted 9.7 per cent.

The scenario was no different on domestic front too. For the week ended November 15, the BSE Sensex slumped 5.81 per cent and the NSE’s S&P CNX Nifty tumbled 5.47 per cent.

The sharp fall last week pushed most of the ADRs to their October low levels. Banking counters – HDFC Bank and ICICI Bank, Satyam Computer and Sify were the worst affected last week.

ICICI Bank crashed by 16.9 per cent while Sify plummeted 18.6 per cent; HDFC Bank tumbled 12.1 per cent and Satyam Computer by 13.9 per cent.

Despite inflation falling to single digit last week (provisional figure only), banking majors tumbled on the back of weak global sentiment towards financial stock. Citigroup plans to cut 10 per cent (or 35,000 persons) also affected the sentiment for these counters.

ADRs of infotech majors suffered on the back weak outlook given by Sun Microsystems, British Telecom and Intel.

Infosys Technologies and Wipro went reeling on news that British telecom major, BT Group Plc, will reduce its workforce by 10,000 in its attempt to cut costs in the current financial year. BT, which has a global workforce of around 1,60,000 direct and indirect staff, said it would cut around 4,000 from its direct BT staff and the remainder from contractors, sub-contractors, consultants, agency staff and offshore workers, in its attempt to cut costs by $1.2 billion.

IT bellwether Infosys Technologies and Wipro were among BT’s outsourcing partners.

Infosys ADR tumbled 7.3 per cent at $24.72 ($26.69) and Wipro by 9.9 per cent at $7.07 ($7.85). Patni Computer, in fact, registered its new 52-week low at $5.01 but ended higher at $5.48 ($5.82), a fall of 5.84 per cent over a week.

Sterlite Industries ADR tumbled 9.39 per cent at $4.44 ($4.9) and Tata Motors declined by 9.05 per cent at $4.02 ($4.42).

The ADR of Rediff.com declined by 7.63 per cent after the company reported drop in net profit. The Nasdaq-listed Rediff.com has reported revenues of $7.32 million for the quarter ending September 30, 2008, down 12.02 per cent from $8.32 million last quarter, and 6.87 per cent for Q2 last year.

Dr. Reddy’s Lab fell 5.8 per cent to end at $8.1 ($8.6).

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