Aug 2, 2003|
Global markets: Hopes of a recovery
US markets lost ground during the week. Both the Dow and the NASDAQ closed the week lower by about 1% each. The week started on a mixed note. Positive results announced by Walt Disney, American Express and AT&T led to some gains on the indices.
For the next two days, however, the markets remained weak. Poor economy report on consumer confidence, which reported a sharp fall, led to weakness on Tuesday. On the results front, Dupont reported better than expected results while McDonald's reported their results in line with street expectations. On Wednesday, technology stocks witnessed selling pressure, led by weak results announced by some technology companies. On the same day, Federal Reserve's Beige Book stated that the US economy had been picking up but capital spending remained weak. This limited the losses on Wednesday.
Markets recovered some losses on Thursday on account of better economy outlook. US Commerce Department indicated that the US GDP grew by about 2.4% in the second quarter, as compared to 1.4% in the previous quarter. This apart, stabilizing labor markets fueled sentiments on Thursday. However, mixed reports on the economy front led to selling pressure on Friday. While unemployment rate witnessed a decline, manufacturing report and flat construction spending dampened investor sentiment.
|(Price in US $)
Indian ADRs remained a mixed bag during the week. MTNL was the top gainer. The company reported results, which were better than market expectations. This increased optimism towards the stock. Dr. Reddy's, on the other hand, witnessed selling pressure on account of poor results announced by the company on a consolidated basis. Technology stocks were a mixed bag. While Infosys lost about 2%, Wipro gained by about 2% and Satyam was almost flat.
While the US markets remained weak during the week, European and Asian markets gained ground. Asian markets topped the charts. Better reports regarding US GDP growth, weekly unemployment numbers and increased manufacturing activity increased optimism the world over. Most of the Asian markets exports come from US and any positive news regarding US economy increases optimism on this front. Better quarterly results in Europe saw their markets gain ground during the week.
Going forward, the slew of economic reports announced during the week will play a crucial role in the short-term for the US markets. Though there are some signs of recovery, one needs to exercise caution, as definite signs of growth are still hazy. However, sentiments may see some improvement and market breadth may remain positive next week.
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