Jul 20, 2002|
Earnings season rocks US markets
Corporate accounting practices and quarterly earnings report stunned the US markets. While the Dow touched four year lows, the NASDAQ is trading near levels seen in April 1997. Meanwhile, the US Federal Reserve indicated that though the economy is showing signs of turnaround, recovery could be delayed.
A host of tech companies announced their quarterly reports, but in general, disappointed markets. Slowdown in tech spending and sluggish demand has impacted performance of these companies. Apple, IBM, Siebel Systems and AMD issued cautious outlook for the current quarter. Sun Microsystems forecasted loss for the current quarter. Microsoft too could not remain immune and scaled back its profits outlook. Motorola, Intel and Citigroup, on the other hand, posted upbeat numbers and outlook.
This time drug giants hurt the market sentiment. Johnson & Johnson confirmed that federal regulators are probing allegations of fraudulent record keeping at its Puerto Rico plant that makes an anemia drug, one of the company's best-selling medicines.
|(Price in $)
Indian tech ADRs followed the trend in US markets while old economy stocks gained selective buying interest. PSU telecom stocks were in demand in otherwise nervous markets.
Sify was the star performer of the week. The company announced its move to acquire all 200 corporate network services customers of Wipro, which were valued at Rs 280 m as on March 2002. Sify has however, not indicated the deal size. Corporate services is one of Sify’s most profitable business (existing client base of 500) and acquisition of Wipro’s customer base would strengthen its leadership.
Dr. Reddy’s also accumulated strong gains. The company's plan of targeting the off-patent generic market and challenging existing patents seems to be bearing fruit. The company has recently filed an ANDA for Terbinafine HCL tablets with the US FDA. The drug is a generic version of Lamisil produced by Novartis. The product registered sales worth $460 million last year. Also, M&A activity in the global Pharma industry is likely to have improved sentiment for the sector, as investors expect others to catch the fever.
Wipro lost ground on its lower than expected quarterly performance. The company reported a YoY 19% growth in revenues and 23% decline in bottomline. Excluding the charge of Rs 389 m, Wipro’s profits have fallen by 6%. Pricing pressure trimmed the company’s bottomline in the June quarter.
Bleak weak for the world markets
Accounting frauds from corporate giants and earnings report have spread nervousness in the world markets. While long-term trend looks uncertain, quarterly reports are likely to influence the near term movements of the markets.
More Views on News
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.
Aug 18, 2017
Buying the index now will hardly help make money in stocks even in ten years.
Aug 18, 2017
Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.
Aug 17, 2017
PersonalFN simplifies the mutual fund account statement for you.
Aug 17, 2017
A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
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: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407