The Hindu Business Line : Infotech counters continue to sizzle

As the oil price cooled off a bit, the sentiment at the US equity markets turned positive. The S&P 500 rose 1.8 per cent to 1,400.38, posting second successive monthly gains. The Dow Jones Industrial Average added 1.3 per cent to 12,638.32. The Nasdaq Composite Index increased 3.2 per cent to 2,522.66.

On the other hand, FII selling affected the mood in the domestic market. Despite strong GDP numbers, the sentiment remained weak due to the surging inflation numbers. The BSE Sensex tumbled 1.4 per cent and the NSE’s S&P CNX Nifty, 1.55 per cent.

It was an extremely divergent trend for Indian ADRs. While infotech counters sizzled during the past week, Tata Motors and MTNL registered their 52-week lows.

The star performer was Satyam Computer, whose ADR jumped 16.4 per cent. Infosys saw its ADR surging 14 per cent while Wipro gained over 10 per cent. Patni Computers’ ADR gained 5.5 per cent. The strengthening dollar seemed to have aided the sentiment, as the IT sector still predominantly depends on the US.

The ADR of Tata Motors hit its year-low at $13.5, but closed slightly higher at $13.86 against the previous week’s close of $15.18. The share price tumbled on concerns about its proposal to raise Rs 7,200 crore from rights issues to help fund its purchase of Ford Motor’s Jaguar and Land Rover.

On completion of the rights issues, Tata Motors plans to raise a further $500-$600 million from an overseas equity issue.

Besides, worries over continued weak demand for trucks, buses and cars, rising commodity costs and price rebates on vehicles to attract customers also seemed to have affected the sentiment for the counter.

MTNL ended the week at its year-low price of $4.05 ($4.87), a fall of 16.8 per cent. However, the other telecom major, Tata Communications, finished in positive territory at $24.29 ($23.02).

Sterlite Industries, which on Saturday announced that it agreed to buy the entire operating assets of US-based copper mining company Asarco LLc for $2.6 billion in cash, finished with a gain of 4 per cent at $22.14 ($21.29).

While ICICI Bank finished with a loss of 4.3 per cent at $37.73 ($39.42), HDFC Bank ended in the green at $99.75 ($99.51).

Internet counters, Sify and Rediff.com also slipped 2.42 and 2.37 per cent respectively.

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Infotech counters continue to sizzle

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