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Global markets: Gain one, gain all - Views on News from Equitymaster
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  • Aug 16, 2003

    Global markets: Gain one, gain all

    Markets around the globe gained this week. US indices were also in the positive. While the Dow gained marginally, the upward movement on the NASDAQ was significant, considering that it was in the red throughout the previous week. The Dow closed higher by 1% while the NASDAQ was 3% in the positive.

    The week started on a strong note for both the indices. While the Dow gained marginally, the NASDAQ closed higher by about 1%. Gains on the NASDAQ were mainly on account of buying witnessed in technology stocks. It should be noted that the NASDAQ lost ground during the previous week on account of weakness in technology stocks. Tuesday saw gains on the NASDAQ increase to 2% while the Dow ended up by 1%. Federal Reserve Board decided to keep the Fed fund's rates unchanged. In its statement, it said that while the economy was showing some signs of recovery, the danger of deflation was still lurking. It also said that interest rates might not be increased till the time the economy showed any clear signs of recovery.

    Wednesday saw profit-booking resulting into weakness on the US indices. Not too convinced by the Fed’s remarks of Tuesday, markets exercised caution as fears of a rise in interest rates in line with economic growth overshadowed positive investor sentiments. While the Dow closed lower by 0.4%, Nasdaq closed flat, albeit in the negative. Thursday was marked by marginal gains on both the indices. Throughout the trading period, a series of reports that were released before the bell showing some stability (if not signs of robust growth) in the US economy, generated investors' enthusiasm. However, gains on account of these releases were muted by rising bond yields, which renewed investors' concerns over rising interest rates.

    The last trading day of the week was marked by reactions about the blackout in the financial capital of US – New York. This led to thin volumes and hence flat markets. The blackout seemed to be the only consideration in investor minds. Some traders were even forced to spend time in Manhattan due to difficulties in commuting. Some power utility companies lost ground, however companies aiding them gained ground on expectations that a large quantum of investments would be required for upgrading the ageing US power infrastructure.

    World markets...
    Indices 9-Aug-03 16-Aug-03 Change
    BSE 3,884 3,921 1.0%
    FTSE 4,148 4,247 2.4%
    Dow 9,191 9,322 1.4%
    Nikkei 9,328 9,863 5.7%
    Hang Seng 9,945 10,425 4.8%
    Dax 3,332 3,444 3.4%
    NASDAQ 1,644 1,702 3.5%

    Markets round the globe showed signs of strength with the Japanese Nikkei ending as the top gainer. However, Sensex gained the least in this week. This is in absolute contrast with the previous week when the Nikkei witnessed its biggest slump in almost four months while the Sensex was the top gainer among leading markets. Notably, NASDAQ, which had been hit by slump in technology stocks in the last week, posted smart gains over this week.

    While signs of strength are witnessed in the US and other global markets, the sustainability of this growth still remains very unclear. Investors need to exercise utmost caution and should not move with the herd before any sustainable signs of long-term growth are visible.

    Indian ADRs: A mixed bag
    (Price in US $) 9-Aug-03 16-Aug-03 Change
    Satyam Infoway 10.2 5.8 -42.9%
    VSNL 5.2 4.9 -5.8%
    Dr. Reddy's 23.0 23.9 3.7%
    Silverline 1.6 1.1 -30.6%
    HDFC Bank 22.5 22.8 1.2%
    MTNL 5.3 5.6 5.7%
    Infosys 52.5 51.5 -1.8%
    Wipro 22.8 23.0 0.7%
    Satyam 10.2 10.3 1.0%
    ICICI Bank 7.8 8.1 3.8%
    Rediff 5.4 4.3 -20.6%

    The story for Indian ADRs was mixed. The losers included Infosys, Rediff, Satyam Infoway, VSNL and Silverline. Notably, Satyam Infoway that was the biggest gainer in the previous week lost the most in this week. Rediff continued with its losing streak. However, major gainers over the week were Dr. Reddy’s, MTNL, ICICI Bank and HDFC Bank.



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    Aug 18, 2017 03:37 PM