The Hindu Business Line : VSNL, MTNL decline sharply

THE downtrend was unabated at the US bourses as oil prices continued to spoil the mood by reaching sizzling heights. Last week, the oil prices crossed $68 a barrel for the first time in the history. Further aiding the downslide were the reports of a drop in consumer confidence index (University of Michigan's Index) and Consumer Department data showing decline in durable goods and home resales.

As a result, the S&P 500 dwindled 1.2 per cent to 1205.10 last; according to Bloomberg data this was the largest weekly decline since June 24. The Dow Jones Industrial Average slid 1.5 per cent to 10,397.29. The Nasdaq Composite Index slipped 0.7 per cent for a fourth straight week, its longest losing streak since April.

The domestic markets, which were surging to new peaks week after week on the back of FIIs buying, tumbled sharply as the foreign funds slowdown their buying activity. The BSE Sensex, which had gained over 26 per cent in the last 16 weeks (between May 2 and August 20), slumped 100 points or 1.29 per cent to 7680.22. The NSE's S&P CNX Nifty also dwindled 1.12 per cent to 2357.05.

The Indian ADRs also sailed along with the broad market trend as none of them except Rediff.com gained though Wipro was able to finish on flat note.

Among them, telecom counters VSNL and MTNL suffered the most with the former losing 8.3 per cent and the latter 6.2 per cent. Banking counters ICICI Bank and HDFC Bank also dipped sharply by 6.25 per cent and 4.27 per cent respectively.

IT counters, which declined sharply during mid-week, however recovered. While Infosys Technologies at $69.94 ($70.17) and Satyam Computer at $27.02 ($27.21) recovered partially, the Wipro ADR ended the week a tad better at $19.32 ($19.3).

Rediff.com, however, surged 7.5 per cent to $14.19 ($13.2).

There was no change on the premium/discount front.

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