The Hindu Business Line : IT counters suffer sharply

US stocks ended the week on a weak note following adverse economic data that include worsening job market. The S&P 500 Index declined 2.3 per cent to 876.07 and the Dow Jones Industrial Average 2.2 per cent to 8,635.42. The tech-focussed Nasdaq fell 1.7 per cent to 1509.3.

The weak global cues seemed to have affected the sentiment for the domestic markets. The BSE Sensex and the NSE’s S&P CNX Nifty shed 1.4 per cent and 1.5 per cent respectively amid low volumes.

Among the ADRs, infotech counters witnessed sharp fall on the back after the US announced officially that it is in recession. Besides, the Infosys Technologies CEO, Mr Kris Gopalarishnan, comments that the company will freeze recruitment after meeting this fiscal target of hiring 25,000 staff also affected the sentiment for the whole IT sector. The announcement, according to IT analysts, signals that the global slowdown has started to hit Indian IT majors.

Wipro was the major loser, whose ADR tumbled 11.77 per cent at $6.67 against the previous week close of $7.56. Infosys declined 5.53 per cent at $23.76 ($25.15), Patni Computer fell by 4.27 per cent at $5.6 ($5.85) and Satyam Computer slipped by 3.85 per cent at $12.24 ($12.73).

Banking counters, on the other hand, gained sharply expecting a rate cut (which the RBI announced eventually on Saturday). HDFC Bank moved up 2.7 per cent at $58.74 ($27.2) and ICICI Bank jumped 7.7 per cent at $15.34 ($14.24).

Dr. Reddy’s Lab stole the limelight as the ADR flared up by 8.8 per cent at $9.65 ($8.87). The counter has been gaining ever since it announced the launch of GlaxoSmithKline’s Imitrex tablets in the US market.

However, this week’s biggest gainers were Sify (10.34 per cent) and Rediff.com (11.5 per cent). Both these counters have been witnessing strong selling pressure in the recent past and witnessed a technical bounce back.

Tata Motors and Tata Communications also ended on a positive note with a gain of 4.4 per cent and 2.4 per cent respectively while Sterlite Industries witnessed a fall of 5.3 per cent.

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