In a week that was marked with holidays, the BSE Sensex lost 0.4 per cent and the Nifty was down nearly a per cent in three trading sessions. Stock markets had started the week on a positive note with technology stocks making a comeback after last week's crash. However, early gains were wiped off later when another IT heavyweight Wipro's Q-4 results were announced. As for mid-cap stocks, they remained largely unchanged as the CNX Mid-cap 200 closed the week up 0.09 per cent. In the US, the Nasdaq touched a three-month high (1,425.5 points) this week. Overall, the index gained 5 per cent while the Dow Jones was up 1.6 per cent for the week.
Software major Wipro announced a 2.25 per cent drop in its Q-4 net profits (Rs 225 crore) over the previous quarter. However, the company's revenues rose by 11.7 per cent to touch Rs 1,238 crore in Q-4 vis-a-vis Q-3 revenues. As a result, the stock lost 4.8 per cent over the week. The day Wipro declared its results—which also happened to be the last trading day of the week—the BSE IT Index lost 50 points. Gains made by IT stocks early on in the week though helped the index move up by 1.6 per cent. Infosys gained 13.3 per cent this week. In comparison, Mastek, which was hammered last week, continued its losing streak, falling 3.7 per cent over the week. With margins getting squeezed in the BPO industry due to price cuts, future earning expectations have come down. This, in turn, led to a meltdown in IT stocks.
On the other hand, the FMCG major, Hindustan Lever, registered an 8.2 per cent rise in net profits in Q-4 over the previous quarter. While the stock remained nearly flat this week, the BSE FMCG gained 0.4 per cent. As for other sectoral indices, the BSE Healthcare remained flat despite pharma major Ranbaxy losing 3.7 per cent over the week. The BSE PSU lost 0.6 per cent this week.
In a significant development, the BSE has announced replacements of companies in four indices. Twenty-six companies will be replaced in the BSE 100, 44 in the BSE 200, 94 in the BSE 500 and 4 in the BSE TECk. These changes will transpire with effect from May 26, 2003.
After remaining sellers last week, both the FIIs and the mutual funds turned buyers this week. While the FIIs bought equities worth Rs 35 crore this week, mutual funds had bought Rs 24 crore worth of equities (till Wednesday).
Outlook
If corporate results continue to be dismal, stock markets are likely to be in a depressed mode. Also, expectations of a below-normal monsoon could again dampen sentiments.
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