K.S. Badri Narayanan
IT was a mixed week for the US equities; the Dow Jones Industrial Average and the S&P-500 gained even as the tech-heavy Nasdaq slipped.
The US Federal Reserve Chairman, Mr Alan Greenspan's announcement that inflation remains contained and the economy is on a `firm footing' seemed to have boosted the Dow Jones and S&P 500 indices. However, for the Nasdaq, Intel's higher sales forecast that failed to satisfy the investor community appeared to have affected the sentiment.
The Dow Average increased 0.5 per cent last week to 10,512.63 while the S&P 500 added 0.2 per cent to 1198.11. The Nasdaq, however, fell 0.4 per cent to 2063.
The domestic benchmarks - the BSE Sensex and the NSE's S&P CNX Nifty - also witnessed divergent trend with the former gaining marginally while the latter closed a tad weak.
However, most of the Indian ADRs remained firm; banking counters - HDFC Bank and ICICI Bank - were the star performers apart from VSNL.
The Finance Minister, Mr P. Chidambaram's announcement that the public sector banks would be allowed more autonomy seemed to have triggered a hope that the Government might announce financial sector reforms soon. On this hope, the HDFC Bank ADR jumped to $44.56 against the previous week close of $41.56 and ICICI Bank to $21.73 ($20.49). Their premiums too improved marginally with respect to their underlying stocks.
Infotech counters that were witnessing a firm trend could not sustain the momentum on concerns that Mr Greenspan would signal an increase in interest rates further in the world's largest economy. As Indian computer software companies get about 60 per cent of their sales from that market, they suffered during the later part of the week.
Earlier, the Chief Executive Officer of Infosys Technologies, Mr Nandan Nilekani's comments that its pricing is stable with an upward bias and the company stands by the earlier projection of 28-30 per cent profit for the full year appeared to have lifted the IT sector.
Infosys closed a tad better at $71.45 ($71.16) and Wipro surged to $21.54 ($20.97), while Satyam slipped to $24.6 ($25.15).
MTNL closed marginally higher at $6.77 ($6.65) after the company reported that it had added 76,423 users during May.
VSNL, on the other hand, surged sharply to $10.25 ($9.75) after it reported a robust financial performance; its fourth-quarter (2004-05) profit more than quadrupled to Rs 399 crore from a year ago while sales rose 15 per cent to Rs 934 crore.
The firm crude prices seemed to have affected Tata Motors; the ADR fell to $9.64 ($10.12). Earlier, the company announced that its sales in May increased 2.7 per cent due to exports. The company sold 30,589 cars, trucks, buses and sport-utility vehicles last month.