The Hindu Business Line : Banking counters shine

APART from trend reversal on oil prices, concern over the view that the US Federal Reserve may hike interest rates to contain raising inflation affected the sentiment at the US markets. The global crude oil prices, which dipped below the $46-mark per barrel, rose above $47 at the weekend.

As a result, the S&P 500 fell 1.2 per cent since November 12 to 1170.34, retreating from a three-year high. According to Bloomberg data, the decline snapped the biggest three-week rally for the index in two years.

The Dow Jones Industrial Average lost 0.8 per cent to 10,456.91 for the week while the Nasdaq Composite Index declined 0.7 per cent to 2070.63.

For the domestic market, the sudden eruption of "ownership issues" in the Reliance group as well as a rise in the weekly inflation rate triggered a fall, snapping the three-week gaining trend. The BSE Sensex, which breached the 6000-mark earlier during the week, fell back to end at 5961.71 as against last weekend's close of 5964.01 and the NSE's S&P CNX Nifty closed the week at 1872.35 (1872.95)

Among the ADRs, HDFC Bank and ICICI Bank finished on a firm note. The move by ICICI Bank to raise its benchmark lending and mortgage rates seemed to have inflicted a positive sentiment. Moreover, the amendment of Securitisation Act, which gives power to banks to take over the management of companies that default on loans, part of a drive to clean-up bad debts, also inspired banking stocks.

MTNL inched up marginally to $8.17 against the previous week close of $8.15; the Union Communication Minister, Mr Dayanidhi Maran, said that the government will decide in six to eight months on a merger of BSNL and MTNL.

Among the IT counters, Infosys and Satyam Computer fell while Wipro ended the week on a positive note. Satyam fell despite announcing signing of an MoU with the Indian Institute of Technology - Madras, to facilitate R&D projects. Wipro seemed to have gained on news that it has entered into a tie-up with SAS for industry-specific business intelligence solutions.

Sify and Rediff. Com also gained while Dr. Reddy's Lab closed on a weak note.

Satyam ADR's premium continued to slide; it now trades at a premium of 38.09 per cent (47.15 per cent) while other counters did not see much deviation on the premium/discount front.

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