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Global markets: The bottomline nudge

Apr 24, 2004

Buoyed by robust results from the tech sector companies, NASDAQ, the US tech index, returned with a flourish and ended the week, edging higher by almost 3%. The Dow, on the other hand, ended almost flat. The week saw investors vacillating between both good as well as bad news. While robust earnings reports and encouraging macroeconomic trends kept them optimistic, concerns over probability of an early interest rate hike kept them on tenterhooks, thus leading to choppy trading for most part of the week. Markets remained jittery on Tuesday, mainly on account of comments from the Fed, which seemed to suggest that a rise in short term interest rates is imminent.

But the pessimism soon waned and bulls took charge for the next two days, as investors focused on earnings reports and macroeconomic trends, which by and large had been encouraging. With tech bellwether, Microsoft, announcing buoyant results as well as forecast, investors lapped up the good news and rewarded other technology stocks, resulting in the tech-laden index registering robust gains. The broader market, however, remained largely lackluster.

Indices 16-Apr-04 23-Apr-04 Change
NASDAQ 1,996 2,050 2.7%
Hang Seng 12,458 12,384 -0.6%
Nikkei 11,825 12,121 2.5%
BSE 5,863 5,927 1.1%
FTSE 4,537 4,570 0.7%
Dow 10,452 10,473 0.2%
Dax 4,034 4,104 1.7%

As far as the global indices across the world are concerned, barring the Hong Kong benchmark, Hang Seng, all of them ended higher for the week. While NASDAQ turned out to be the star performer, the Japanese Nikkei was not far behind. NASDAQ posted most of its gains on Friday rising 1.2% over Thursday, as investors bought into tech stocks, following software behemoth, Microsoft's earnings release in the US markets.

While tech stocks ruled the roost in US and East Asian markets, a clutch of solid numbers across sectors as varied as auto, pharma and food, lifted the major European indices higher for the week. Indian benchmark, BSE, also witnessed gains over the week as robust results from India Inc. continue to trickle in. Exit poll results and inclusion of the country as a prospective investment destination by CalPERS, the largest pension fund in the US also added to the optimism.

(Price in US$) 23-Apr-04 30-Apr-04 Change
Dr.Reddy's 22.0 21.8 -1.0%
HDFC Bank 31.0 31.2 0.6%
ICICI Bank 16.1 17.3 7.5%
Infosys 84.9 88.0 3.7%
MTNL 8.3 8.6 3.6%
Rediff 12.2 13.0 6.6%
Satyam 21.6 21.0 -2.8%
Satyam Infoway 7.4 8.5 14.9%
VSNL 8.2 8.5 3.7%
Wipro 41.4 49.2 18.8%

It was a strong week for Indian ADRs as, barring pharma major Dr. Reddy's, and tech major Satyam, all the rest witnessed gains. Interest among the tech laden NASDAQ rubbed off on Indian tech ADRs also, as bellwethers, Infosys as well as Wipro witnessed gains over the week. Satyam, however, witnessed profit booking, despite announcing robust FY04 results at the fag end of the week. Dotcom ADR Satyam Infoway, which gained 15% over the week, emerged as the highest gainer, mainly on the back of its robust results. Telecom and banking ADRs were among the other stocks that ended higher for the week.

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