May 22, 2004|
Global markets: Crude prices behave
A mix of both good as well as bad news and an opportunity for bargain hunting at lower levels resulted into the US benchmark indices posting mixed results for the week. However, the difference was only marginal. While the tech laden Nasdaq, ended the week with marginal gains, Dow edged marginally lower.
While higher crude prices and tensions in Iraq were already weighing on the markets for quite some time now, huge sell off in India on account of political unrest further added to the woes and triggered a global sell-off on Monday. US markets did not remain immune to it either. However, an opportunity for bargain hunting and robust results from a couple of tech heavyweights resulted into some gains over the next couple of days. With the week drawing to close, crude prices finally showed signs of easing off following reports that Saudi Arabia is pushing OPEC to affect a production raise by around 2 m barrels a day. This, along with re-affirmation by the Fed that interest rate rise will be a slow and steady affair, did soothe some nerves and prevented further downfall.
Among the world's other major indices, while Asian heavyweights, Nikkei and Hang Seng posted strong gains, European indices remained under pressure and suffered marginal declines. While banking and retail stocks led the strength in Nikkei, rising crude oil prices and drying up of corporate results season saw the European markets posting lackluster performances for the week. However, the week's ignominy was reserved for Indian benchmark BSE, which after witnessing a second highest intra day downfall on account of political drama, recovered over the next couple of day but still ending 2% below the breakeven.
It was surprisingly a good week for the Indian ADRs as barring telecom major VSNL, all the others either ended little changed or witnessed strong gains. Tech majors led the charge with Wipro, which edged 9% higher for the week, emerging as the highest gainer. The buying interest was perhaps triggered by robust results as well as strong forecasts issued by couple of US tech heavyweights, which had a rub off effect on Indian tech ADRs. Pharma major Dr Reddy's, which ended higher by 2% was among the other major gainers.
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