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K.S. Badri Narayanan

GRIM corporate news from companies such as Boeing Co, EMC Corp, Northern Trust Corp and Schering-Plough Corp shook the US markets last week, which tumbled to its lowest in almost five years and ended a sixth straight losing week.

For the week, the S&P 500 dropped 3.2 per cent 800.58, just two points above the five-year low reached in July. It last fell six weeks in a row in February and March 2001. The Dow lost 2.3 per cent to 7528.40, the lowest since November 13, 1997. The tech-focussed Nasdaq fell 4.9 per cent to 1139.90, its lowest since September 6, 1996. The fall came amid concern that an eight-day West Coast port shutdown will slow the economy. Further, the Bush administration efforts to get Congressional authorisation for the use of force against Iraq could accelerate the slide.

For the domestic markets, the derailment of disinvestments process, sustained selling by FIIs and weak trend in the US markets affected the sentiment. The Bombay Stock Exchange's Sensitive Index closed below the crucial 3000-mark at 2930.51, a drop of 3.5 per cent. The National Stock Exchange's S&P CNX Nifty closed at 948.70 against the previous week close of 976.45.

Among the Indian ADRs, ICICI Bank finished the week on firm note at $6.18 ($5.93). Reports that eight borrowers will pay debts owed to the bank seemed to have influenced the counter. The settlement would result in a recovery of Rs 570 crore.

Infotech majors, Infosys and Wipro, closed the week slightly lower. Infosys closed the week at $53.36 ($55) and the ADR now trades at a reduced premium to the underlying stock. The premium dipped below the 50-per cent mark (in fact after several weeks), to 47.28 per cent against the previous weekend premium of 52.02 per cent.

Wipro, which signed an agreement to buy the local software development centres of Ericsson AB, the world's largest maker of cellular networks, closed at $27.03 ($27.40) respectively. According to the agreement, Wipro will take over Ericsson centres in Bangalore, Hyderabad and New Delhi along with their employees. Ericsson, in turn, will purchase software services from Wipro. This deal could make Ericsson among Wipro's top 10 clients.

Satyam Computer, however, closed on a weak note at $8.90 (9.09) while Silverline Technologies was able to inch up at $0.67 ($0.66).

The stake sale by Satyam Computer in its Internet subsidiary Satyam Infoway (Sify) did not help the former though the latter recovered on strong note. Softbank Corp, Japan's Internet investor, and VentureTech, decided to buy 33.4 per cent of Sify for $20 million from Satyam Computer. Softbank Asia Infrastructure Fund and VentureTech will buy

7.56 million and 2.03 million new ADRs of Sify. Satyam's stake will fall to 35 per cent after the transaction is completed.

Sify, on the other hand, closed on a strong note at $1.6 ($1.08), recovering from $.90 level.

Both MTNL and VSNL, which were at loggerheads over ILD price issue, finished a shade lower. While MTNL closed at $4.51 ($4.60), VSNL ended at $4.50 ($4.63), after registering its new 52-week low at $4.49

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