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K.S. Badri Narayanan

ONCE again the fear of possible terrorist attacks, particularly following the car bomb explosion outside the US Consulate in Karachi (Pakistan), seemed to have affected the sentiment at the US markets. Besides, the US Government's announcement on industrial production (less than the market expectation) and the drop in Univeristy of Michigan's index of consumer sentiment to 90.8 (96.9 last month) aided further downslide to the falling markets.

The Dow Jones Industrial Average slid to 9474.21, a drop of 1.2 per cent over the previous week close of 6589.67. The tech-heavy Nasdaq slipped two per cent to 1504.74 (1535.48).

However, the weakening of border tension appeared to have helped the domestic markets to look up. The Bombay Stock Exchange's Sensex finished higher at 3312.07 (3217.76) and the National Stock Exchange's S&P CNX Nifty at 1075.70 (1048.80).

Despite the weak close of US markets, particularly Nasdaq, Indian tech ADRs finished the week relatively on a firm note. A couple of orders for the top IT firms seemed to have revived the sentiment for the beleaguered IT stocks.

Union Bank of India, which is planning to come out with an IPO in mid-July, has tied-up with Infosys and Wirpo for implementing its Rs 150-crore IT initiatives. While Infosys will provide the core banking solution, Wipro will be responsible for the end-to-end implementation and integration of bank's centralised IT system.

Infosys had also signed a 10-year contract with Aeronautical Development Agency (ADA) for Autolay software product in a move to commercialising the defence technologies. This arrangement could fetch both the parties up to $5 million in the current year. (Both these parties have a revenue-sharing arrangement).

Infosys closed the week at $57.51 over the previous week close of $55.489. Wipro finished at $31.43 ($29.95) and Satyam Computer at $10.96 ($10.20). However, these ADRs continued to hover around the previous week premium/discount levels without much change. In the domestic markets, Infosys closed at Rs 3,392.25 (Rs 3,243.30) and Wipro at Rs 1,585.05 (Rs 1,485).

Telecom counters — MTNL and VSNL — also scored smart gains. MTNL finished the week at $5.69 ($5.30) and VSNL at $6.90 ($6.60). In fact, the MTNL ADR gained over 17 per cent since June 1. A section of the market feels that the Indian Government will divest its stake in MTNL soon. This could have sparked an interest in the counter.

Bank counters — HDFC Bank and ICICI Bank — also ended the week in positive territory. While HDFC Bank closed at $15 ($14.22), ICICI Bank at $7.70 ($7.62).

Dr. Reddy's Lab, which announced better performance for the last fiscal, also finished firm at $20.54 ($20.17).

Overall, it was one of the good weeks for the Indian ADRs.

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