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.
Wall Street revives but… - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Aug 10, 2002

    Wall Street revives but…

    It was the largest percentage gain recorded by the US markets for the week, after May 2002. Both the Dow and the NASDAQ gained nearly 5%. Improvement in investor psychology on hopes of interest rate cuts by the Federal Reserve in its next policy meeting pushed up the markets.

    News of a US$ 30 bn financial bailout by IMF, for debt-ridden Brazil, intensified expectations for rate cuts. The lifeline from IMF helped ease fears that Brazil might default on its US$ 250 bn public debt. It was the same concern, which plagued Argentina earlier this year. The announcement propelled banking giants, Citigroup and J.P. Morgan Chase that have invested heavily in Brazilian companies.

    Cisco also infused buying interest on its better than expected quarterly performance. The company however, indicated cautious spending by its customers. Sales warnings from data storage equipment maker, Emulex however, spoiled market mood on the last trading day of the week. Qwest too reported US$ 1.1 bn quarterly loss and WorldCom revealed an additional US$ 3.3 bn accounting error in earnings. The latest finding doubled the accounting errors of the company to more than US$ 7 bn.

    The street was also wary about the outlook for profits on a slew of sluggish economic data. Growth in the productivity of US workers slipped sharply in the second quarter to 1.1% from a strong 8.6% growth recorded in the previous quarter. Non-manufacturing index fell to 53.1 in July from 57.2 in June, reflecting a slowdown in the US service sector. Consumer spending, which powers the economy growth, also grew at a slower pace in June by US$ 8.4 bn, down from US$ 9.5 bn in May.

    Internet stocks shine
    (Price in $) 3-Aug-02 10-Aug-02 Change
    Satyam Infoway 0.5 0.6 18.8%
    Rediff 0.4 0.4 17.1%
    Satyam 8.1 8.8 9.4%
    Wipro 22.9 24.9 8.6%
    MTNL 5.2 5.3 1.0%
    HDFC Bank 14.1 14.2 0.8%
    VSNL 5.1 5.0 -1.4%
    Infosys 53.4 52.2 -2.2%
    ICICI Bank 5.8 5.6 -4.5%
    Dr. Reddy's 19.1 18.0 -5.8%
    Silverline 1.2 0.9 -29.2%

    Indian ADRs were up selectively. Internet stocks, Rediff and Sify were the strong gainers of the week. While Silverline crashed by 29% on reports that the company is lacking working capital to pay salaries of its employees in US and in India. MTNL was the most volatile stock of the week. The stock gained nearly 20% on Thursday, only to take a u-turn the next day (down 19%).

    Sify was the largest gainer, on news that Reliance Infocom is interested in acquiring a controlling stake in the company. Sify’s promoter Satyam is also in talks with Infosys, Wipro and Tata group for selling the stake in the company. Meanwhile, Satyam too flared up by 9% for the week after reports that private equity firm, Warburg Pincus, has bought over 5% stake in the company through the open market, hiking its total stake to 8%. Warburg invested about US$ 70 m to acquire 16.8 m shares of the company (Rs 204 per share). Satyam has also signed an agreement with Saint Gobain, US to provide IT services.

    Infosys lost nearly 2% of gains on news that its chief marketing officer has quit the company to join rival Wipro. Last month Infy’s global head of sales and marketing had resigned to defend himself in a sexual harassment case in the US. Wipro’s ADR, on the other hand, gained over 8% during the week.

    Europe leads the pack
    Indices 3-Aug-02 10-Aug-02 Change
    Dax 3,532 3,761 6.5%
    FTSE 4,076 4,322 6.1%
    Dow 8,313 8,745 5.2%
    NASDAQ 1,248 1,306 4.7%
    Nikkei 9,710 10,000 3.0%
    Hang Sang 9,992 10,014 0.2%
    BSE 2,985 2,976 -0.3%

    The world markets witnessed a strong rebound after having remained subdued in the last two months. The revival in the US economy is however, uncertain. Grim outlook for corporate earnings, slump in equity markets and a host of accounting scandals could dent the US economic growth. The International Monetary Fund (IMF) has already expressed worries about expected recovery in the US economy. Consequently, the trend in markets could remain weak.

     

     

    Equitymaster requests your view! Post a comment on "Wall Street revives but…". 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.

    Will They Haul Off Trump's Statue, Too? (Vivek Kaul's Diary)

    Aug 16, 2017

    All across the country, the old gods become devils. New, gluten-free gods take their places...

    This Company Beat the Business World's 'Three Killer Cs' (The 5 Minute Wrapup)

    Aug 16, 2017

    And what it has in common with beating the stock market too.

    5 Steps To Become Financially Independent (Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    Let's Hope This Correction Continues (The 5 Minute Wrapup)

    Aug 14, 2017

    Last week's correction is making a number of Super Investor stocks look a lot more attractive...

    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.

    Proxy Plays: A Smart Way to Bet on 'Off Limits' Companies(The 5 Minute Wrapup)

    Aug 4, 2017

    The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.

    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 17, 2017 09:54 AM

    MARKET STATS