The Hindu Business Line : Good show by Indian counters

The year began on a promising note for equities across the globe. Stocks advanced the most since November after fewer Americans filed for jobless claims and oil’s biggest weekly increase in two decades lifted energy companies. The Dow Jones Industrial Average jumped 6.1 per cent, the S&P 500 gained 6.8 per cent and the Nasdaq rose 6.7 per cent.

The domestic bourses also witnessed sharp rally; the BSE Sensex rebounded 6.75 per cent and the NSE’s S&P CNX Nifty by 6.63 per cent.

Except for Sify and Rediff.com, the other ADRs witnessed sharp rally last week. The biggest gainers among them were banking majors ICICI Bank and HDFC Bank. Both the ADRs jumped 18 per cent following the second stimulus package announced by the Indian Government, which include a steep cut in cash reserve ratio, repo and reverse repo rates by the RBI. In fact, after the announcement, both the ADRs gained 8.4 per cent and 7.5 per cent, respectively, on Friday.

The other big gainer was Tata Motors, whose ADR jumped 11 per cent despite it saying that vehicle sales for December dropped 51 per cent to 14,056 units from 28,661 units in the same period last year.

The second stimulus package announced on Friday had a slew of positive measures for the ailing auto sector. According to it, public banks will offer a special line of credit to NBFCs for truck and bus financing, second commercial vehicles bought from January 1 to March 31 will be able to claim 50 per cent accelerated depreciation and as a one-time measure, the States would be provided with assistance under the Jawaharlal Nehru National Urban Renewal Mission to purchase buses for urban transport systems.

Telecom majors MTNL and Tata Communications also went up but the gain was sharp for the former. The MTNL ADR jumped 11 per cent on reports that the Finance Ministry has asked the Department of Telecom to double the reserve price in the auction of spectrum for providing 3G telecom services. The DoT had earlier deferred the global auction for 3G spectrum – originally planned for January 16 to January 30. This could benefit MTNL as it has launched its 3G services in Delhi in December.

Among the IT majors, Satyam Computer jumped 13 per cent, Infosys gained 4.5 per cent, Patni Computers rose 10.15 per cent and Wipro went up 8.39 per cent. Satyam jumped on media speculation that the company might see a change of guard.

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