The Hindu Business Line : Premium takes a dip

BOTH the US and Indian bourses moved in similar direction, though the latter showed much vigour. The US Labour Department reports that about 2.62 lakh employments were added in February (the highest since October last), seemed to have lifted the US stocks, which were reeling under the oil price pressure.

As a result, the S&P 500 added 0.9 per cent to 1222.12 last week while the Dow Jones Industrials gained 0.9 per cent to 10,940.55. The tech-saavy Nasdaq advanced 0.3 per cent to 2070.61.

Indian bourses were jubilant thanks to the pro-market Budget. The Bombay Stock Exchange's BSE Sensex jumped 4.26 per cent to 6849.48 and the NSE's S&P CNX Nifty gained 4.23 per cent to 2148.15. This was a historic close level for both the Sensex and Nifty.

Despite gains at the US bourses, most of the Indian ADRs finished on a weak or flat note. This divergent movement has resulted in narrowing down the premiums (with respect to their underlying equities) enjoyed by the Indian ADRs.

The ICICI Bank ADR finished weak at $21.99 ($22.19). But the stock finished firm on the BSE after a court receiver took over the assets of Martia Chemicals that defaulted on loans taken from the bank. The ADRs premium dipped to 21 per cent (32 per cent).

However, HDFC Bank ended on firm note; its ADR, in fact, breached its previous 52-week high level to register a new one at $47.7 and closed the week at $47.61 ($45.65). Its premium also widened a bit to 18.4 per cent (16.8 per cent).

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