X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Fed flares up the US markets - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Jun 30, 2001

    Fed flares up the US markets

    The interest rate cuts had a positive impact on the US markets. Although, it was a delayed rally, sentiment turned bullish backed by an improvement in earnings outlook by the tech majors. Economy too signaled some signs of progress. The Dow meanwhile ended lower hurt by Honeywell Inc.

    It was a record week for the NASDAQ. The index ended in the positive territory for all 5 days. In the initial trading days the mood in the markets was mixed, as some of the leading corporates issued profit warnings. Merrill Lynch indicated the larger than expected drop in earnings (about 37%). Rising inventory problems forced Applied Micro Circuits to forecast a quarterly loss (below anticipated profits) and Xilinx warned 32% slump in first quarter profits. Palm Inc (which reported loss) and Oracle, on the other hand projected a turnaround in business by the year-end. Microsoft also contributed in positive sentiment, as the ruling for the split of the company is overturned.

    In the first quarter this year, companies profits contracted by 6.2% YoY, higher than 4.3% YoY decline in the fourth quarter earnings.

    Sighting a downturn in the industrial activity and economic weakness, the Federal Reserve announced an interest rate cut of 25 basis points to 3.75%. Although modest, the rate cut is expected to reinvigorate the sliding economy. The policy makers also left the door open for more rate cuts in future if needed. The six rate cuts announced by the policy makers during the year is reflected in some economic data. Personal consumption expenditure rose by a healthy 3.4% in the first quarter compared to 2.8% in the previous quarter.

    Dr. Reddy’s stays on the top
    (Price in $) 23-Jun-01 30-Jun-01 Change
    Dr. Reddy's 17.1 18.6 8.7%
    Silverline 2.8 3.1 8.2%
    Infosys 62.9 65.0 3.3%
    VSNL 13.7 13.4 -2.1%
    Satyam 9.0 8.7 -3.1%
    Rediff 2.1 2.0 -3.8%
    ICICI 9.7 9.2 -5.1%
    Wipro 30.0 28.0 -6.8%
    ICICI Bank 5.5 5.0 -8.5%
    Satyam Infoway 3.8 3.4 -10.1%

    Among the Indian ADRs, Dr. Reddy’s maintained its top position for the second consecutive week. Silverline and Infosys were the gainers among the tech ADRs, and Sify was out of favour.

    The Indian pharma major Dr. Reddy’s is attracting strong buying interest in the US markets backed by latest development going on in the company. FII limit has however reached 28% in the company and further buying of the stock requires RBI’s permission.

    Danish pharma major Novo Nordisk is planning to take one of the two diabetic drugs licensed to it by Dr. Reddy’s to the third stage of clinical trials. The market for both these drugs is expected to be around US$ 2 bn. Dr. Reddy’s could receive milestone payment when the drug goes into the third stage. The company has also obtained tentative FDA approval for its Omeprazole 40 mg capsules and Fluoxetine 40 mg capsules. Dr. Reddy’s estimated annualized branded sales for 40 mg Fluoxetine capsules at more than US$ 250 m and US$ 100 m for Omeprazole 40 mg capsules.

    Silverline was another star of the week. The stock was traded with huge volatility and managed to end higher by about 8%. The company has entered into a partnership with Intraspect Software, the leader in collaborative business, to provide clients with software based on Intraspect’s technology platform.

    ICICI group companies lost ground on concerns over Dabhol Power project, which is currently under the state of flux. Bank of Japan is planning to invoke the guarantees given by ICICI for the project. This could affect its future financial performance.

    The sentiment in the US markets this week was better than the past few weeks. Interest rate cut by the Fed has provided some direction to the markets, which were lacking a trigger. Going forward the eyes are on the first quarter results, which could influence the markets movements.

    NASDAQ on a roll
    Indices 23-Jun-01 30-Jun-01 Change
    NASDAQ 2,035 2,161 6.2%
    BSE 3,382 3,457 2.2%
    Nikkei 13,045 12,969 -0.6%
    Dow 10,605 10,502 -1.0%
    Hang Seng 13,174 13,043 -1.0%

     

     

    Equitymaster requests your view! Post a comment on "Fed flares up the US markets". Click here!

      
     

    More Views on News

    How to Ride Alongside India's Best Fund Managers (The 5 Minute Wrapup)

    Jun 10, 2017

    Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.

    You've Heard of Timeless Books... Ever Heard of Timeless Stocks? (The 5 Minute Wrapup)

    Aug 19, 2017

    Ever heard of Lindy Effect? Find out how you can use it to pick timeless stocks.

    Why NOW Is the WORST Time for Index Investing (The 5 Minute Wrapup)

    Aug 18, 2017

    Buying the index now will hardly help make money in stocks even in ten years.

    Trump Takes a Beating (Vivek Kaul's Diary)

    Aug 18, 2017

    Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.

    How To Read Your Mutual Fund Account Statement Correctly (Outside View)

    Aug 17, 2017

    PersonalFN simplifies the mutual fund account statement for you.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE SENSEX


    Aug 18, 2017 (Close)

    S&P BSE SENSEX 5-YR ANALYSIS

    COMPARE COMPANY

    MARKET STATS