The Hindu Business Line : HDFC Bank, ICICI Bank maintain upward trend

NOTWITHSTANDING the threat of the US-led war over Iraq, the US stocks rose for the second consecutive week, as investors seemed to have faith on economy. The Standard & Poor's 500 Index posted a weekly gain of 1.6 per cent to close the last week at 848.17 over the previous week's close of 834.59. The Dow Jones Industrial Average rose 1.4 per cent at 8018.11 (7908.80), while the Nasdaq Composite Index advanced 3 per cent to 1349.02 (1310.17) — its largest weekly rise since the period ending January 10.

The Indian markets too posted smart gains, riding on expectations of a market-friendly Budget. The 30-stock Bombay Stock Exchange (BSE) Sensex breached the critical 3300-mark and gained 84 points or 2.6 per cent to 3307.20 (3223.41). The National Stock Exchange and the S&P CNX Nifty also recorded a rise of 36 points or 2.91 per cent, at 1066.15 (1036).

Despite firm Nasdaq, the Indian infotech majors ended the week on a lacklustre note. Infosys Technologies closed the week down at $63.72 ($65.07), while Satyam Computer and Wipro ended up with a very marginal gain. Meanwhile, Infosys Technologies Ltd's shareholders on Saturday approved a plan to double the company's ADRs by converting local shares. Infosys plans to convert as many as 3 million local shares into ADRs.

Sliverline Technologies, despite announcing to the Securities and Exchange Commission (SEC) that it was in discussions with two US clients to outsource their business requirements, finished negative at $.50 ($.52). The company also announced that it was in the process of obtaining two other major projects in the billing and data processing areas and further stated that it was also in negotiations with an Asian company to enter into a joint venture that will enable Silverline to enter other markets. These announcements, however, seemed to have had a positive impact in the domestic market, as the stock closed firm at Rs 13.25 (Rs 11.40). The divergent trend resulted in sharp slump in the ADR's premium to the underlying equity. The Silverline ADR now trades at a discount of 9.95 per cent as against the previous weekend premium of 9.15 per cent.

Dr. Reddy's Lab also closed the week lower at $18.59 ($19.05) amid concerns that its hypertension drug amlodipine maleate launch could be delayed if Pfizer's application for the same is accepted.

Banking counters — ICICI Bank and HDFC Bank, however, continued their upward march on hopes that the Indian Government may raise foreign investment limits for the sector. HDFC Bank closed the week at $16.09 ($15.33) and ICICI Bank at $7.13 ($6.98).

Another significant gainer was VSNL, which ended the week at $3.74 ($3.45).

After a brief stint, dotcom counters Satyam Infoway and rediff.com resumed their upward trend.

There was not much deviation in the premium/discount of other counters.

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