The Hindu Business Line : Infosys, VSNL shine

FEARS that Corporate America's profit may slow in the second half of the year coupled with the indifferent Government data indicating that companies added less than half the jobs expected, spoiled the mood of the US markets. As a result, the broader S&P 500 index dropped 0.8 per cent to 1125.38 for the week, its third consecutive decline. The Dow Jones Industrial Average dropped 0.9 per cent to 10,282.83 and the Nasdaq Composite Index slid 0.9 per cent to 2006.66.

In fact, the benchmarks climbed after the US Federal Reserve raised the rates to 1.25 per cent from 1 per cent (as expected), the lowest in almost 46 years.

The domestic markets, on the other hand, witnessed a smart recovery ahead of the General Budget, scheduled for July 8. The BSE Sensex climbed 2.40 per cent to 4895.48 points and the NSE's S&P CNX Nifty 3.2 per cent to 1537.50.

On the ADR front, despite the weak US market, a majority of the Indian counters closed the week in positive territory. Leading the pack was VSNL and Infosys.

Infosys rose on expectation that the company may raise its profit forecast when it reports its earnings for the fiscal first quarter on July 13. Infosys closed higher at $95.49 against the previous week's close of $93.72.

However, Satyam Computer and Wipro ended on a weak note at $18.44 ($18.9) and $15.25 ($15.63) respectively.

VSNL finished firm at $7.77 ($7.10) after the company announced its expansion plans.

It said that it will spend Rs 2,000 crore during the current fiscal to expand operations. The company's international arm, VSNL Singapore Pte, will set up a unit in Hong Kong to start operations. VSNL also announced its plans to enter the UK market.

Another telecom major MTNL also finished on a firm note after the company announced that it will receive Rs 264 crore refund for a tax dispute for the year ended March 1998. The counter closed the week at $7.03 ($6.85).

HDFC Bank closed higher at $27.13 ($26.8); HDFC Bank's clarification (in response to media reports) to the exchange that it is not considering a share sale seemed to have affected the sentiment towards the counter mildly.

ICICI Bank closed marginally lower at $11.9 ($12). Domestic financial institution Life Insurance Corporation announced that it has acquired an additional 2.23 per cent stake in the bank. Consequent to the purchase, its holding in the bank increased to 10.09 per cent. ICICI Bank closed marginally lower at $11. ($12).

Pharma major Dr. Reddy's Laboratory finished marginally higher at $17.12 ($17.07). It may be recalled this counter along with other pharma counters witnessed a severe drubbing in the recent past after foreign brokerage firm CLSA downgraded Indian pharma sector.

The Internet counters Sify and Rediff.com, however, finished on weak note.

There was not much deviation on the premium/discount front, as most of the counters held on to the previous week's closing levels.

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