Dec 27, 2003|
Global markets: Santa giftwraps gains…
Good times continued to roll on the US indices during this holiday shortened week. Despite concerns over terrorist attacks and a reported case of mad cow disease, the indices managed gains over the week. For the week ending December 26, 2003, the Nasdaq gained a little over 1%, while the Dow edged higher by a little less than 1%.
The threat of terrorist attacks that impacted last Friday’s trading, remained obtrusive for a longer period than imagined, thus affecting the trading on Monday also. Dearth of corporate news and economic reports also added to the light and volatile trading on Monday. But the markets recovered at close to end the day with gains. Despite mixed economic reports and still more concerns over terrorist attacks, the Nasdaq managed a gain of 1% on account of bullish reports from a couple of tech companies on Tuesday. Renewed pressure on dollar on account of a weak report on the manufacturing front and first reported case of mad cow disease in the US, resulted in the indices suffering a decline on Wednesday, albeit marginally. While the markets remained closed on Thursday on account of Christmas, the bulls came to the fore again on Friday and the indices posted marginal gains on the back of strong holiday sales reports from a clutch of companies.
Major indices across the world all posted gains and once again gave enough evidence of the growing financial integration among world economies. BSE, once again was the star performer, registering gains of nearly 3%. The country achieved yet another land mark, when for the first time, country’s forex reserves touched the coveted US$ 100 bn mark. This further added to the steady stream of buoyant economic and corporate reports that is influencing one of the fastest bull runs in recent times on the Indian bourses. The continued good performance of the US economy also had a positive impact on two of the biggest exporters to the US, viz. the Europe and Japan and as a result, major indices in the region ended the week with gains.
|(Price in US$)
On the back of buoyancy on the Indian as well as the US bourses, the Indian ADRs witnessed robust growth and a few of them even ended the week with almost double-digit growth. Telecom ADRs, MTNL and VSNL were among the lead gainers and deservedly so, since the Indian telecommunications ministry made a couple of announcements, which will have a positive impact on the fortunes of the industry. The news included the proposal to hike the foreign investment limit in the telecom sector to 74% from the current 49%, however, capping the FDI limit at 49%. Further, a cut in the revenue sharing by 2% across the board and an extra 2% cut for first and second licenses would result in substantial savings for the cell operators. Also, a proposal to restructure the debt of loss making telecom companies was also brought forward. Banking ADRs as well as tech ADRs, barring Satyam, also ended the week with substantial gains.
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