Oct 16, 2004|
Global markets: A splash of red…
Rising crude prices and concerns over global economic health led to the US indices recording their second straight week of declines. For the week ended October 15, 2004, while the Nasdaq edged marginally lower, Dow witnessed a decline of more than 1%.
The week’s proceedings commenced in an upbeat manner as major indices witnessed gains on Monday ahead of a slew of earnings announcements and economic reports. With a couple of tech bellwethers slated to announce their results after the bell on Tuesday, investors appeared a bit reluctant to sell and as a consequence the indices barely budged. Also preventing the sell off was a slight retreat in crude prices. The bears however dominated for the next two days. Further rise in crude prices on Wednesday and a report from China that the government would take measures to slow down economic growth of the country led to weakness in commodities and the Dow came in for quite a fair bit of battering.
The story of rise in crude prices repeated itself on Thursday and consequently forced the Dow to hit a two-month low. Weak earnings report from auto major, General Motors, also added to the woes. The last trading day of the week saw the indices managing marginal gains on the back of the Fed chairman announcement that crude prices are likely to have only a limited impact on the economy. Strong macroeconomic numbers also helped soothe investor nerves. However, the gains were not enough to cover up for the losses witnessed earlier in the week and as a result, the indices edged lower for the week.
A splash of red was evident across all the major indices of the world with the Japanese benchmark, Nikkei, losing the highest and falling off more than 3%. Weakness in commodity stocks and concerns over record high crude prices weighed on investor minds and led to the benchmark index witnessing declines for all the five sessions of the week. While similar issues also affected the sentiments in Europe, a US lawsuit aimed at alleged manipulation in the insurance sector led to weakness among insurers and further added to the downside.
|(Price in US$)
Selective buying was witnessed among Indian ADRs during the week. Tech ADRs remained the companies of choice on the back of robust results announced by them. Both Infosys and Wipro announced their second quarter results during the week and both reported a similar 15% sequential growth in bottomline during the three-month period. As a consequence, the ADRs gained by 9% and 3% respectively for the week. It also had a rub off effect on Satyam, another tech major, as it also edged higher by 9%. Banking ADRs were among the other companies that gained on the US bourses during the week.
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