Nov 9, 2002|
Stock markets: Taking a breather
The US markets have extended the rally in to the fifth consecutive week though marginally. The Dow has been net gainer while the NASDAQ has lost marginally. The US bourses stuttered at the weekend after warnings from Mc Donald’s and Cisco Systems over their performance in the current quarter. Sentiments were also affected due to uncertainty over Iraq’s response to the UN resolution. Major trigger points like the Fed cut and the elections too have failed to enthuse investors.
Lack of a trigger may cause the investors to remain passive in the coming weeks. For the coming weeks a lot depends on the way investors analyse the Fed rate cuts. Also a lot will depend on the mood of consumers after the rate cut. The holiday season may see a revival of sorts for the US economy backed by low interest rates. The next week may be crucial as they may decide the direction for the markets for the rest of the year.
|(Price in $)
Top rung Indian software ADRs like Infosys, Satyam and Wipro were the only net gainers in the current week. ICICI Bank and the two PSU telecom carriers VSNL and MTNL were the main losers for the week. Silverline carried forward its losing streak from last week losing nearly 14% this week. Wipro witnessed profit booking yesterday after it rose on Thursday on reports that it has been able to obtain a big software services order from the banking giant, Lehman Brothers. The software services order is expected to contribute US$ 30-40 m (Rs 1.5-2.0 bn) to Wipro’s yearly revenues.
Indian ADRs could witness lacklustre activity in the coming weeks due to lack of a trigger. Top rung software ADRs especially have gained considerably post results announcement and may witness profit booking in the coming weeks.
Global markets performed better than last week closing in positive territory though only marginally. The sentiment is likely to remain subdued due to uncertainty over the Iraq issue and lack of direction from the US markets. Indian bourses too closed in the positive territory though marginally. There were only three trading days in the current week. The Indian bourses stated slipping towards the end of the week falling for two consecutive days on Thursday and Friday. Investors may not be active in the coming weeks as here is no apparent trigger to prop up the markets. The week ahead is likely to remain volatile for the global stock markets.
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