Apr 12, 2003|
Economy takes precedence
US markets were largely lackluster for the week except for Wednesday when a sharp fall was registered in the same. The current week was dominated more by domestic economic concerns than the war in Iraq, which is nearing an end. Investors were concentrating more at broad economic numbers as well as corporate earnings scorecard in order to assess their position in the stock markets. The week started on a positive note though only marginally. While the coalition troops made significant gains in Iraq investors were worried by the direction of the economy post war.
Tuesday however saw the US indices decline marginally as investor worries reflected on the stock markets. On Wednesday investors were in an unforgiving mood and the markets fell considerably. Investors do not seem to be expecting good results from corporates in the forthcoming results season. Also there seemed to be nervousness as more economic numbers were to be announced on Friday. Thursday saw the markets listless again and they gained marginally, indicating the general atmosphere of uncertainty prevailing in he minds of investors. On Friday however markets lost further despite good economic numbers coming from the retail sales and wholesale prices arena. Uncertainty may be the prevalent theme going forward till the results start pouring in. Any disappointment on the results front is likely to bring further weakness to the markets
|(Price in US $)
Global markets were weak during the current week. South Asian markets like the Nikkei and Hang Seng were weak mainly due to the concerns over the SARS virus and the economic impact it would have on the economy of that region. European markets on the other hand seemed to be worried more about the post war implications on the economy of Europe. The German Dax however managed to stay in the positive for the week. The Indian Sensex was one of the major losers during the week and lost more than 5%. This was mainly due to the disappointing guidance given by the software sector pivotal, Infosys. In the weeks to come market movements may be dictated more by corporate earnings numbers than the war.
It was a disastrous week for Indian ADRs. Almost all counters lost ground with the exception of Dr Reddy’s and Satyam Infoway. The spoilsport was the Infosys results. While the company posted robust FY03 numbers (topline up 39%, while bottomline was up 19%) the guidance given by it amounted to only a 12% growth in earnings in FY04. This news significantly dampened the market mood and software counters lost considerable ground on the Indian markets. The poor sentiment on the Indian markets was also reflected on the US bourses and software counters bore the maximum brunt of investor pessimism. Other software majors like Satyam and Wipro also lost considerable ground on expectations of poor guidance by these companies for FY04. Going forward the performance of Indian ADRs will to a large extent depend on news flows from the subcontinent, especially results news.
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