Aug 28, 2004|
Global markets: Oil price cheers...
With some pressure easing off on crude prices and absence of any negative economic news, the US indices edged higher for the week. Both Nasdaq as well as Dow scaled 1% each.
After last week's gains, investor buying remained a little subdued and markets started the fresh week amidst declines. What also led to the selling was lowering of August sales forecast by retail giant Wal-Mart, thus sparking fears of economic slowdown. The lackluster behaviour continued on Tuesday also and markets ended little changed despite another drop in oil prices. However, the fourth consecutive session of an oil price drop on Wednesday and that too by a significant 4% brought back cheers and the indices witnessed strong gains. Infact, Dow closed at its highest in nearly six weeks. Low volumes continued to haunt the markets for the next two days with the indices largely circling around the breakeven. However, the strength during the early part of the week was enough for the indices to register a reasonable 1% gain during the week.
Buoyancy was also witnessed among various indices across the globe. Edging higher by a significant 4%, Hong Kong benchmark, Hang Seng emerged as the highest gainer during the week. Not far behind with gains of 3% was its Japanese counterpart, Nikkei. This was despite indication by some economic reports that Japanese household spending has been falling and all is not rosy on the employment front as well. The buying was probably in anticipation of Fed chairman's speech whereby he is expected to uphold the optimistic outlook of the US economy, a good sign for exporting country like Japan. Falling crude prices and stable US economic figures also helped the major European indices to post strong gains during the week.
Indian ADRs witnessed mixed activity during the week. However, no particular sector witnessed across the board buoyancy and it was the individual ADRs that witnessed buying or selling interest. Among the gainers, dotcom major, Rediff led the pack with gains of nearly 12%. On the other hand losing nearly 3%, tech major Satyam emerged as the biggest loser. Infosys with gains of 2% was the lone gainer among tech stocks. Looking at the company's 1QFY05 performance, it seems that the management's objectives of 40% and 34% growth in revenues and profits are achievable. While margins will continue to remain under pressure, a move higher up the value chain will help the company in meeting its growth targets. Pharma major Dr Reddy and ICICI Bank were among the other gainers during the week.
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