The Dalal Street is expected to extend the gains of the past sessions this week on hopes of a robust earnings season that begins with the Infosys numbers on Tuesday, and a rebound in the global markets, say analysts.
"The market is likely to see a gap-up opening on Monday and will gain further as investor confidence is upbeat on hopes of a robust first quarter earnings, supported by a rebound in the global markets," Geojit BNP Paribas research head Alex Mathews said.
The market is keenly awaiting the numbers and guidance of the IT bellwether Infosys, which will kick-off the results season on July 13. The IT bellwether not only sets the mood of the sector but the entire market, say analysts.
"The strong rebound in corporate earnings growth witnessed in the March quarter is expected to continue in the first quarter of this fiscal. The adjusted earnings of the Sensex companies are expected to grow by a strong 22.5 per cent year-on-year in the June quarter," brokerage firm Sharekhan said in a note.
Progress of the monsoon, coupled with positive economic data, hopes of a robust corporate earnings season and the rebound in global markets will keep investor sentiment upbeat on the Dalal Street, says analysts, adding the progress of the monsoon has already boosted market sentiment and investors are willing to bet high.
"A bumper foodgrain production will substantially ease the inflation rate and will be helpful for the economy," Mathews said.
Last Friday, agriculture minister Sharad Pawar said the country is likely to have bumper foodgrain production in the current crop year on the back of a good monsoon and a rise in area under cultivation.
Analysts say sugar stocks may attract some buying on the government talk over the deregulation of sugar prices in the future. Though the broader market may move in an upward range this week also, stock-specific actions will be more prominent, say brokers.
"Investment sentiment is bullish after the IMF raised the growth outlook for the country and the market is likely to continue the upward journey in the coming days also," Bonanza Portfolio vice-president for equities RL Narayanan said.
Supported by an upgraded global economic outlook by the IMF, coupled with some cool-off in domestic food inflation, the domestic market joined its global markets which ended with good gains past week. During the week, the Sensex recorded a cumulative jump of 2.13 per cent.
Late last week, the IMF raised the GDP growth outlook for the domestic economy in 2010 to 9.5 per cent, up from its earlier estimate of 8.8 per cent this April, as it expects robust corporate profits and favourable financing conditions to fuel investments.
"FIIs are optimist about the India growth story and they will continue to park their funds here," Narayanan added.
So far in July, FIIs have put in a net Rs 1,690 crore in the domestic equities taking their total exposure till now in 2010 to over Rs 32,760 crore.