Jan 4, 2003|
Global Markets: Indian ADRs disappoint
While it was a mixed day for US markets yesterday for the whole week the Dow has gained by nearly 4% while the NASDAQ has gained nearly 3%. The current week has been shortened due to the 1st January holiday. US markets greeted the new year with heavy gains on the 2nd January. But the sentiment fizzled out yesterday as the US markets showed lacklustre performance. Though the markets rallied on the 2nd it was with low volumes indicating lack of strength in the rally. The US goverment is going to announce an economic stimulus package and this may keep the markets bouyant. For the whole week the US markets closed in the black due to the huge gains seen on the 2nd.
It must be kept in mind that until a broader and sustained trend emerges regarding the revival of the US economy any rally is likely to be short lived. Selective interest may be seen on the US markets in anticipation of estimates of yearly results this month. Having said that we must point out that the performance of corporate America is not expected to cheer US investors much.
Global indices reflected the bullish sentiment on the US markets in the current weeek. Though the markets have closed above their last week levels the sustainability of these levels is in question. With the Iraq situation seen far from resolution and no positive signs of expected recovery investor sentiments could be frayed.
Indian ADRs have been volatile on the US indices in the last week. Yesterday too there was weakness among Indian ADRs but software majors like Infosys and Wipro gained despite the gloom. Major losers were ICICI Bank, VSNL and Satyam. Without a clear trigger from the US markets Indian ADRs may continue to remain volatile. However some interest may be seen in software ADRs in anticipation of announcement of their quarterly results. Infosys particularly may witness interest as reports indicate that it may revise its FY03 earnings estimates upwards.
Indian markets closed down for the week though only marginally. The markets have been volatile for most part during the week. Disinvestment news was one of the key drivers of the markets this week. Beginninng of the week saw disappointment in the form of delay in the disinvestment process. But by the end of the week the solicitor general's approval for the disinvestment seemed imminent and this cheered the markets again. This recovery helped the markets post only a marginal loss compared to last week. Software counters were the key gainers during the week. This was mainly in anticipation of announcement of quarterly results in this month. Indian stock market may continue to remain buoyant in expectation of better corporate results especially from sofware companies.
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