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K.S. Badri Narayanan

WITH accounting malpractices in more and more companies coming out in the US, the sentiment at the stock markets has taken a toll. After Enron, it is now the turn of WorldCom and Xerox Corp, to disclose that they have not followed accounting ethics. The result was the Dow Jones Industrial Average crashing below the crucial 9,000-mark and the tech-focussed Nasdaq kissing the new low after the September 11 terrorist attacks.

However, it seems the US markets digested the bad news quickly as they recovered marginally. The Dow Jones Industrial Average closed the week at 9243.26against the previous week close of 9253.79. Nasdaq ended the week in positive territory at 1463.21 (1440.96).

Back home, in the domestic markets both the major bourses ended the week on a flat note. While the Bombay Stock Exchange's Sensex closed at 3244.70 (3242.75), the NSE's S&P CNX Nifty ended the week lower at 1057.80 (1062.55).

Among the ADRs, VSNL suffered the most as its partnership with WorldCom to provide frame relay service affected the sentiment for the counter. VSNL could face payment difficulties.

Even, the statement from an official of WorldCom Asia-Pacific in Hong Kong, Ms Rowena Kowk, that the payments to VSNL were routine and would not be affected failed to lift the sentiment for VSNL.

Among tech ADRs, Satyam Computer finished the week on a better note at $10.47 ($9.91) though the market leaders — Infosys and Wipro — closed on a weak note. Infosys closed at $51.20 ($53.19) (recovering from week's low of $46.51).

Infosys now trades at a reduced premium (to the underlying domestic equity) of 53.37 per cent compared to the last week, when it was trading a premium of 65.80 per cent.

The Wipro's Chairman, Mr Azim Premji, hinted that the company was looking at acquisitions in the US, Europe and in India.

However, the Wipro counter did not react much to his statement as it moved in a tight band. Wipro closed at $29.97 ($30.06).

Among the major gainers were Dr Reddy's Laboratories and ICICI Bank.

Dr. Reddy's now trades at a marginal premium of 0.28 per cent against a discount of 3.71 per cent last week. This is because the domestic equity fell to Rs 945.65 (Rs 963.35) while the ADR finished firm.

It was a similar story for ICICI Bank. While the ADR finished firm at $7 ($6.60), the stock closed weak at Rs 137.40 (Rs 139.90), widening up the premium to 24.51 per cent (15.41 per cent).

There was not much deviation in the other counters' premium.

Both dotcom companies — Satyam Infoway and Rediff.com — registered their new 52-week lows at $.50 and $.03 respectively.

While Sify closed the week at $.521 ($.717), Rediff closed at $.46 ($.50).

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