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K.S. Badri Narayanan

THE growing fear over corporate ethics and an unexpected drop in the University of Michigan index of consumer confidence were enough to sent the US markets to their biggest weekly declines since the aftermath of September 11 terrorist attacks. Even, the US President, George Bush's attempt to calm investor fears failed to yield any positive impact on the markets.

The Dow Jones Industrial Average, fell 7.4 per cent during the week to close 8684.53 against the previous week close of 9379.50. The tech-heavy Nasdaq slumped 5.2 per cent to 1373.50 (1448.36) and the S&P 500 slid 5.98 per cent to 921.39.

However, in relative terms, the domestic majors — the BSE and the National Stock Exchange — were better, though both ended marginally down. The BSE Sensex finished lower at 3305.83 (3330.61) and the NSE's S&P CNX Nifty at 1058.25 (1073.80).

Despite the weak trend around, the Infosys ADR finished the week on a firm note. In fact, this was the only ADR, which finished the week in positive territory while Silverline Technologies ended on a flat note at $1.57. Others swam with depressed undercurrent. Infosys ADR closed at $56.90 ($56.50).

Infosys announced a 14.1-per cent jump in its net profit at Rs 216.85 crore against the corresponding quarter previous year figure of Rs 190.03 crore. The net profit was moderately up (3.1 per cent) when compared to the previous quarter i.e. Q4 of 2001-2002.

The result, which sweetened the US investors, seemed to have turned sour for the domestic players. The underlying stock finished the week on a poor note at Rs 3,320.80 (Rs 3,414.30).

This divergent trend helped the ADR to trade (to the domestic equity) at an improved premium of 67.15 per cent compared with last weekend 52.98 per cent.

Other IT majors Wipro and Satyam Computer closed the week on a dull note at $27.27 ($29.15) and $10.65 ($11.50) respectively. In the domestic market, Satyam finished slightly better at Rs 241.75 (Rs 240.70) while the Wipro stock tumbled to Rs 1,303.60 (Rs 1,398.45).

VSNL, which is facing troubled time due to the WorldCom fiasco, also closed in negative territory at $6.13 ($6.25). The stock also closed the week on a weak note at Rs 148 (Rs 151.90).

Among Internet ADRs, Rediff.com finished marginally better at $.46 ($.48) while Satyam Infoway closed slightly down at $.489 ($.50).

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