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  • MARCH 9, 2002

Economic data drives US markets

Expectations of a revival in the US economy and improvement in corporate profits brought back sheen on the US markets. The NASDAQ spiraled by 7% and the Dow gained 2% over a week. Software stocks attracted frantic buying interest, fueling both the key indices.

Early during the week, Sprint Corp., the No. 3 long distance telephone company, reaffirmed its 2002 financial outlook for its long distance and Sprint PCS wireless divisions. Sun Microsystems joined the list by forecasting a marginal rise in revenues and profits for the current quarter.

Reports coming in from the economy indicated signs of a recovery in the US economy. The non-manufacturing index rose sharply to 58.7 in February, its highest level since November 2000. The index was down to 49.6 in January 2002. Orders for manufactured goods also showed a rise of 1.6% in January driven by higher demand for transport equipments, computers and electronic products. The reading was higher than 1.5% expected by economists. Data on unemployment were encouraging. The number of initial jobless claims fell by 5,000 to a seasonally adjusted 376,000 for the week ended March 2. Unemployment rate also declined for a second week in line to 5.5% in February from 5.6% in January. The Fed chairman too confirmed signs of an improvement in economy, which worried investors of a possible interest rate hike.

Infy regains glory
(Price in $)2-Mar-029-Mar-02Change
Infosys56.772.528.0%
Rediff1.21.310.0%
Wipro38.041.79.8%
Satyam12.113.29.2%
Silverline2.22.48.6%
ICICI Bank6.26.55.7%
Satyam Infoway1.61.74.3%
ICICI7.78.03.9%
HDFC Bank16.016.53.1%
VSNL7.17.0-1.6%
Dr. Reddy's22.522.0-2.2%
MTNL6.35.9-6.6%

Indian tech ADRs followed the NASDAQ trend and attracted strong demand. Selective old economy stocks ended in red with renewed buying interest in software stocks. MTNL was the key loser.

Infosys jumped by 28% over a week and it was one of the most active stocks among the Indian ADRs. Premium on its ADR increased to 67%.

Rediff gained 10% after the company announced the launch of its first subscription-based service, Rediffmail Pro. It is a value added personalized service for businessmen and self employed professionals that provides users a corporate online identity through a corporate email address. The e-mail service is priced at a minimal fee of Rs 1,499 for a period of one year for 30 MB storage space. This would increase the revenue base of the company.

Wipro too accumulated similar gains. The company announced setting up a global development center for California based, Corona Networks. The partnership is to assist Corona in implementation of its product and provide support in future product development. Corona Networks serves the current and future needs of the converging aggregation and IP services market space.

Asian markets rebounds
Indices2-Mar-029-Mar-02Change
Nikkei 10,812 11,886 9.9%
Hang Sang 10,425 11,233 7.7%
NASDAQ 1,803 1,930 7.0%
Dax 5,097 5,360 5.1%
FTSE 5,169 5,286 2.3%
Dow 10,369 10,572 2.0%
BSE 3,679 3,657 -0.6%

The world markets have witnessed a sharp rebound in the current week, continuing the upbeat sentiment of the previous week. Over a fortnight almost all indices managed to accumulate record gains on the back of hopes of a turnaround in the world’s largest economy, the US. However, the US markets are still concerned about corporate earnings, which could result in profit taking at higher levels in the coming week.

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