Jun 5, 2004|
Global markets: Blue chips rally, techs lag
US indices ended mixed for the week despite a string of positive news at the fag end. For the week ended June 4, 2004, while the Dow ended higher by nearly 1%, Nasdaq edged lower marginally.
On account of a long Memorial Day weekend, the week's proceedings got off to a delayed start and markets edged higher on Tuesday despite terrorist attack on Saudi Arabia, world's premier oil supplying nation. This pushed the crude futures beyond US$ 42 per barrel but it failed to spook investors as they bought into stocks mainly on hopes that this might delay interest rate hike. With OPEC members assuring to increase oil output ahead of their Thursday's meeting, crude futures fell below US$ 40 per barrel and this fueled another rally on Wednesday as any fears of stifling of economic recovery were allayed, at least for the time being.
However, the issue of rising crude prices got sidelined on Thursday as Friday's monthly payrolls report, a document around which will revolve Fed's interest rate hike decision took center stage. As a result investors remained jittery ahead of the release of the report and preferred to sell off their holdings, thus triggering a Nasdaq led sell off. However, the bulls were back in action on Friday on account of a spate of positive news. While the job recovery in the US continued with employers adding another 248,000 jobs to their payrolls in May, crude prices also declined for the second straight day and further added to the buoyancy. Also, strong sales forecast by chipmaker Intel, gave a fillip to tech laden Nasdaq, but was not enough to cover up for declines earlier in the week. Dow however, closed higher by nearly 1% for the week.
Major indices across the world also displayed mixed sentiments during the week. While European indices remained robust, Asian markets barring Indian benchmark BSE, witnessed declines. The rally on European indices was mainly a result of strong buying in tech stocks, following upbeat forecast by chip giant Intel. Although Asian indices gained at the fag end, it was not enough to reverse the declines suffered earlier in the week and as a result ended lower for the week.
Indian ADRs ended mixed for the week. While tech heavyweights and private sector banking major, HDFC Bank, edged lower for the week, dotcom and telecom ADRs witnessed buying interest. Also among the gainers were ICICI Bank and pharma major Dr Reddy's. Telecom major, MTNL gained nearly 9% over the week and emerged as the highest gainer. The optimism seems to be the result of the fact that DoT (Department of Telecommunications) was contemplating its merger with BSNL thus giving them a national footprint and the might to take on the likes of Reliance and Bharti. Decline in tech stocks on the other hand must have been largely a result of profit booking as these companies had witnessed significant appreciation over the last two weeks.
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