Sep 14, 2002|
Wall Street stays on sidelines
The US markets fell for the third consecutive week, as the sentiment was hit by war fears and grim economic data. Outlook from corporate America was also not so encouraging to bring back buying interest at lower levels.
Early during the week, Nokia, the world's No. 1 cell phone maker, cut its sales target for the third quarter amid sluggish demand for mobile network equipments. Lucent too indicated that its business was getting worse than market expectations. The company expects more job cuts, as spending by telecom companies continues to deteriorate. On the other hand, bright outlook from Adobe Systems, during the fag end of the week helped trimming losses in tech stocks.
Data coming in from economy are not showing signs of recovery. Initial claims for unemployment benefits climbed up by 19,000 to a seasonally adjusted 426,000 for the week ended Sept. 7. It was the highest level since April 20, when claims hit 427,000. Consumer sentiment index too fell to 86.2 in September from 87.6 in August. Meanwhile, the Federal Reserve warned of a ballooning government deficit due to higher imports in the second quarter. The cumulative effect of these factors is likely to get reflected in the US GDP growth for the third quarter.
Winner is Wipro
|(Price in $)
Indian ADRs gained selectively. Wipro and Sify were the star performers of the week. Wipro was also in limelight in the domestic markets on speculations that the company has received large order from an MNC major. Wipro however, denied the news of getting any such order.
Sify was also up by over 3% and was one of the most active stocks among the Indian ADRs. Sify surrendered its letter of intent (LoI) for international long distance (ILD) services to the department of telecom. Limited opportunities for growth and lower revenues from ILD operations triggered this move of Sify. The company will instead focus on growing its core businesses of Internet and networking, and extending its leadership in every line of business.
Sify’s competitor, Rediff, recorded significant losses. Sentiment in telecom stocks, VSNL and MTNL was marred by dour outlook given by US telecom majors. Indications of merging MTNL with BSNL also concerned investors about expected privatization of the company.
Nikkei beats the trend
The US markets are lacking upward movements, as investors are still not confident about expected revival in the US economy. Business outlook from companies is also dim. In the near term, the markets are likely to remain dull in absence of any positive trigger.
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