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K.S. Badri Narayanan

FOLLOWING disappointing sales forecast from Texas Instruements, Xilinx Inc and Altera Corp, the US markets tumbled. Even the softening oil prices failed to revive the sentiment for US equities.

Last week, the S&P 500 fell 0.3 per cent to 1188. The Dow Jones Industrial Average lost 0.5 per cent to 10,543.22 and the tech-focussed Nasdaq Composite Index slid 0.9 per cent to 2128.07.

Slow-down in FIIs activity, Selling by local funds and Reliance tangle seemed to have spoiled the mood for Indian equities. The BSE Sensex scaled a new record high during the week but failed to maintain at higher levels and ended the week sharply down by 1.41 per cent. The NSE S&P CNX Nifty also shed 1.3 per cent over last week.

On the ADR front, except ICICI Bank, all the other counters ended on weak note. Reports that ICICI Bank Ltd hired Calyon to arrange a $75 million loan to expand its business in the UK appeared to have helped the counter. HDFC Bank, which said it will raise as much as $300 million by selling ADRs, fell sharply to $38.55 ($41.74). Even the bank's announcement that it plans to increase the interest rate on car loans failed boost to sentiment for the counter.

The firm trend in rupee (against dollar) seemed to have affected the IT stocks. Satyam Computer was the worst hit among them.

Satyam said it plans to convert as many as 30 million shares into ADRs worth about $360 million.

MTNL which said that it was planning a VRS to cut its workforce failed to lift its ADR. However, at the BSE, it finished on a firm note. As a result of divergent trend, the counter's premium also crashed. MTNL, which closed at $7.23 ($8.5), now trades at a premium of 3.85 per cent (22.52 per cent).

Tata Motors also fell after some confusion over its partnership with UK's MG Rover group. The company now clarified that it's relationship with the UK firm is continuing. Earlier, there were reports that Tata Motors may end its partnership with Rover if the UK carmaker formed a venture with Shanghai Automotive Industry Corp, China.

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