Infy ADR tumbles; Nasdaq at 27-month low

Infy ADR tumbles; Nasdaq at 27-month low
ENS ECONOMIC BUREAU

Infy ADR tumbles; Nasdaq at 27-month low

MUMBAI, MAR 4: Even as the SEBI launched an investigation into the 176-point Sensex crash, more trouble seems to be in store for Indian tech stocks. The Nasdaq composite index tumbled to a 27-month low on Friday and Wall Street recorded yet another dismal week on a spate of corporate profit warnings from US tech majors, especially software giant Oracle.

On Nasdaq, Infy (the Infosys ADR) crashed by a whopping $17.37 to $73 on Friday. This crash came after Infosys plummted by 13 per cent and fell below the Rs 5,000 mark on the Bombay Stock Exchange on Friday. Sify (the Satyam Infoway ADR) gained 19 cents to $4.62, Redf, the Rediff.com ADR, remained unchanged at $3.25.

The Nasdaq composite index fell 65.74 points, or 3% to 2,117.63, bringing its weekly losses to 6.4%. Friday's decline was the Nasdaq lowest close since December 18, 1998. The Dow Jones industrial average finished little changed, gaining 16.17 points to 10,466.31 and rising 0.2% for the week.

At home, there was a huge erosion in investors' wealth following Friday's market crash. The combined market-cap of 1,588 companies has plunged by a huge Rs 35,412.94 crore in a single trading session to Rs 6,40,303.12 crore from Rs 6,75,716.06 crore.

Software stocks led the market to crash on fears of slowdown of orders for software firms from US companies, after a statement by Federal Reserve chairman Alan Greenspan that the US economy is on a weak path. The combined market-cap of 19 large software firms slipped by over Rs 19,000 crore to Rs 1,17,169.45 crore from Rs 1,36,228.97 crore.

Wipro, Infosys Technologies, Satyam Computer and HCL Technologies were the big losers in market-cap. While Wipro's market-cap has tumbled by almost Rs 8,000 crore to Rs 48,314.80 crore, Infosys Technologies' market-cap has fallen by nearly Rs 5,000 crore to Rs 32,731.45 crore.

HLL in top slot:

The sharp setback in Wipro's market-cap has given way to consumer goods major Hindustan Lever (HLL) to become the biggest company in India in market-cap. With the HLL scrip kept out from the sell-off on the bourses, it has become the No 1 company in market-cap, with a market-cap of Rs 51,141.94 crore. This is higher by about Rs 2,800 crore as compared to Wipro's market-cap of Rs 48,314.80 crore. Wipro has been pushed back to the No 2 slot.

After a near 10% decline on Thursday, the Satyam Computer scrip crashed 16% to Rs 262.65. Software bellwether Infosys Technologies tanked 13.35% to Rs 4,924, on top of a 9% fall on Thursday. Dealers said there were strong rumours that US telecom equipment major Nortel has cut orders of domestic software firms. A statement by Infosys managing director S Gopalkrishnan to a newswire agency that the company is neither negotiating billing rates or downsizing orders from existing clients, failed to avert the slide on the counter.

Some of the prominent stocks that hit 16% lower limit were SSI (Rs 1,016.65), Visualsoft Technologies (Rs 556.95), Aptech (Rs 174.40), Himachal Futuristic Communicatoins (Rs 603.20), Global Tele-Systems (Rs 312.60), DSQ Software (Rs 303.85), HCL Technologies (Rs 484.85) and Silverline Technologies (Rs 145.40).