The Hindu Business Line : Infy, Satyam slip

THANKS to strong performance by General Electric co, the US market recovered from its six-week low levels last Friday, but that was enough for the benchmarks to end last week in positive territory.

The S&P-500 declined 1.1 per cent last week, registering its fourth consecutive weekly loss, the Dow Jones Industrial Average dropped 0.7 per cent, a third straight week decline and the tech-focussed Nasdaq tumbled 3 per cent following disappointing performances from Yahoo! and Veritas Software.

For the domestic market, it was a big occasion as the Budget was presented Thursday last. The market was volatile after the Finance Minister introduced a turnover tax 0.15 per cent, which the traders feel could affect the liquidity. The BSE Sensex, however, climbed 1.54 per cent, after jumping hurdles of the proposed turnover tax and absorbing panic reaction even as the Budget contained fairly impressive incentives to specific sectors.

The S&P CNX Nifty firmed up one per cent.

Led by tech counters Indian ADRs witnessed a fall. However, a few counters such as Dr. Reddy's Lab, HDFC Bank and MTNL closed the week in positive note.

The general weakness for tech counters in the US seemed to have affected the sentiment for the Indian counters. Besides, there were no positives for IT companies in the Budget to trigger a rally.

Infosys closed last week lower at $44.91 ($47.745) and Satyam at $17.95 ($18.44); Wipro, however, ended slightly higher at $15.75 ($15.25).

Banking counters opened last week on a weak note following the RBI's direction on individual shareholders' stake, which may force some of the private banks to sell their holdings.

The RBI in an attempt to broaden shareholdings in banks said no single individual or group of owners should own a stake in excess of 10 per cent in any private bank. The central bank also plans to limit the stakes banks can hold in other non-state lenders to five per cent. This rule would also apply to foreign banks. But the counters recovered on the Finance Minister's Budget speech proposing to amend the relevant provisions to plug holes in the Securitisation Act, which enables bankers to recover NPA.

ICICI Bank closed at $11.8 ($11.9) after touching a low of $11.1 during intra-week. HDFC Bank closed higher at $27.27 ($27.13).

The Government move to raise foreign direct investment in telecommunications companies to 74 per cent from the current 49 per cent, appeared to have lifted the spirits for MTNL. The counter closed a tag higher at $7.07 ($7.03).

VSNL, however, closed lower at $7.3 ($7.77) despite the company announcing that it had settled a dispute with Flag Telecom Group Ltd, a unit of unlisted Reliance Infocomm Ltd, for using more bandwidth capacity on Flag's undersea cable lines.

Despite Sify's announcement that it had acquired EAP Global - a global provider of Information Assurance consulting solutions, the counter ended on a weak note at $5.81 ($6.23).

On the premium front, while there was no deviation for other counters, Wipro ADR's premium jumped to 43.89 per cent against last week's 32.59 per cent.

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