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K.S. Badri Narayanan

THE warnings from the FBI on possible terrorist attacks and the concerns over sluggish economic growth seemed to have affected the sentiment in the US markets. The US Government data on GDP, a key measure of economic growth, grew at a revised 5.6 per cent annual rate in the first quarter, well below the market expectation.

An average volume of 1.08 billion shares per day this week, the slowest week since the final week of last year, also suggested that the summer slump had already begun.

In this backdrop, the Dow Jones Industrial Average finished the week on a poor note at 10,104.26 against the previous week close of 10,353.08, shedding 2.40 per cent in the process. The tech-focussed Nasdaq closed at 1661.49 (1741.39), a sharp drop of 4.58 per cent.

The sentiment back home was no different. The border tension between India and Pakistan kept the market gloomy. However, the Preme Minister, Mr A.B. Vajpayee allaying fears of an immediate war did snap the eight-day slide. In fact, domestic markets bounced back on Friday with a gain of 4.5 per cent or 141 points (the Bombay Stock Exchange Sensex) erasing most of the losses. The Sensex finished at 3255.62 (3333.76), after testing an intra-week low of 3106.56. The National Stock Exchange's S&P CNX Nifty finished at 1067 (1096.65).

Except Satyam Computer and Silverline Technologies, none of the other ADRs finished in the positive territory. Even in these cases, the gain was marginal. Satyam Computer closed the week at $10.85 ($10.80) and Silverline Technologies at $1.67 ($1.65).

Wipro, MTNL and Infosys Technologies led the losers' list with sharp fall. Wipro shed 6.17 per cent to $32.84 (35). MTNL closed at $5.65 ($5.99), a drop of 5.67 per cent while Infosys finished the week 5.52 per cent lower at $63.29. These counters now trade at reduced premiums of 2.91 per cent (7.66 per cent), 3.95 (4.57 per cent) and 64.31 per cent (73.59 per cent) respectively with respect to the domestic underlying stocks.

ICICI Bank ADR (merged entity) finished weak at $6.80 ($7.10), a drop of 4.22 per cent over the previous week close. The underlying domestic equity, which is soon to be merged with ICICI on May 31, also finished lower at Rs 133.10 (Rs 140.65).

The premium for Dr Reddy's Lab has almost doubled. It now trades at a premium of 10.71 per cent (5.31 per cent). The ADR closed the week two per cent lower at $21.90 ($22.35) while the underlying stock finished at Rs 969.20 (Rs 991.20).

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