Apr 6, 2002|
War concerns US markets
The trend in the US markets continued to remain subdued for the second consecutive fortnight. Crude oil prices soared to a six-month peak on increasing violence in Gaza Strip. This increased fears that a widening war in the oil rich region could cut oil supplies and impede the US economic recovery. Tech warnings also pulled down the NASDAQ below 1,800.
Early during the week, leading investment bankers lowered their earnings estimates for tech majors including Sun Microsystems and Microsoft. Check Point Software and McData indicated that quarterly results are likely to miss expectations. The markets ignored positive news from Dell, which forecasted to report higher revenues in the current quarter. Losses in the Dow was trimmed by upbeat remark from diversified manufacturer 3M. The company’s quarterly earnings are likely to surpass its earlier expectations on the back of aggressive cost cutting.
Economic data reflected some strength. Construction spending in the US jumped by 1.1% in February, it’s strongest pace since February 2001. New orders for durable goods rose by 1.8% in February. This was higher than a 1.6% rise recorded in January, implying the factory sector is regaining strength. Slower expansion in the US service sector however, hurt the market mood. This is mirrored in the non-manufacturing index, which fell to 57.3 in March from 58.7 in February.
Tech weakens further
|(Price in $)
Indian tech ADRs failed to attract buying interest. Silverline and Sify were the major losers. Finance sector was also out of demand. Selective defensive counters were however, holding ground.
MTNL gained over 3% during the week. The company is expected to generate higher revenue growth on the back of a significant rate cut in domestic long distance telephone charges. The company has also indicated to set up 1,000-seat call centers in two major cities, Mumbai and Delhi. MTNL will transfer excess employees to these call centers, which would improve its productivity and save employee cost.
Dr. Reddy’s also accumulated strong gains. The company filed an application to manufacture a generic version of Plavix, a blood thinning treatment drug of Sanofi, France. The patent for this world-leading drug would expire in 2003. Sanofi has however, filed a court case against Dr. Reddy’s, alleging infringement of the patents covering Plavix.
ICICI tumbled after RBI indicated that no further purchases by foreign investors could be made in the scrip. Total FII holding in ICICI has reached the overall ceiling of 49% of which 32% constitutes ADR holders. ICICI Bank also ended lower by 7%.
War clouds global markets
Mounting concerns of Israel-Palestine conflict has weakened market sentiment globally. This is also reflected from gold prices, which touched two years high. Amidst prevailing uncertainty in the capital markets, investors have opted to go for safe bet (gold). The near term outlook for the US markets is likely to get influenced by quarterly forecast from companies.
More Views on News
Jun 10, 2017
Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.
Aug 19, 2017
Ever heard of Lindy Effect? Find out how you can use it to pick timeless stocks.
Aug 18, 2017
Buying the index now will hardly help make money in stocks even in ten years.
Aug 18, 2017
Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.
Aug 17, 2017
PersonalFN simplifies the mutual fund account statement for you.
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407