Jun 26, 2004|
Global markets: Mixed performance...
US indices displayed mixed trends for the week ended June 25, 2004. While the tech laden Nasdaq ended higher by 2%, Dow edged marginally lower for the week.
The likely handover of power in Iraq and the pivotal Federal Reserve meeting, both due next week, kept the markets on tenterhooks throughout the week. The proceedings got off to a negative start as stocks fell near the fag end of the day on Monday after trading in the sidelines for most part of the day. However, tech laden Nasdaq found favor with investors over the next two days and in the process also gave the broader market an upward push. Relative under valuation and a couple of buoyant news from tech sector companies were largely responsible for the rally. The stocks again retreated on Thursday and ended mixed on Friday mainly due to two strong sessions and also due to jitters ahead of next week's three market moving news, the Fed policy setting meeting, the handover in Iraq and the June payrolls report.
While Asian heavyweights edged higher for the week, European stocks witnessed mixed trends. As in US so also among European and Asian economies, handover of power in Iraq and Fed meeting next week remained the central theme for the stock markets. Indian benchmark, BSE, continued with its lackluster performance and ended marginally lower, despite some buying at the fag end of the week. On account of lack of any significant trigger, all eyes now seem to be fixated on the annual budget scheduled to be announced on 8th next month.
Barring pharma major Dr Reddy's and banking ADRs, other Indian ADRs witnessed strong buying on the US indices over the week. Leading the pack of gainers was International Long Distance major, VSNL, as it ended 16% higher. The company announced its FY04 results during the week and suffered a topline and bottomline decline of 30% and 52% YoY respectively. However, the buying optimism could be the result of company's growth plans both in the broadband segment and DLD and enterprise data services segments. On the other hand, growth in Nasdaq stocks also had a rub off effect on Indian software ADRs as all of them posted significant gains.
Losing 5% during the week, pharma major Dr Reddy emerged as the key loser. The decline could be attributed to growing concerns over the actual size of the US generics market, an area which Indian pharma players are keen to target. It is being believed that the size of the market could actually turn out to be much smaller than what was being anticipated, mainly on account of increased competition, which might put pressure on prices and hence shrink the pie.
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