Mkts to remain firm on earnings optimism: Analysts | business | Hindustan Times
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Mkts to remain firm on earnings optimism: Analysts

business Updated: Jul 18, 2010 15:25 IST

The Dalal Street is expected to remain in the positive zone this week on strong earnings optimism, though the market may be volatile in early session due to overnight weak overseas advice, analysts say.

"Tracking weak global cues, the market is likely to open with a negative bias on Monday but would recover later in the day," SMC Global vice-president Rajesh Jain said.

Over the weekend, the Wall Street closed in deep red with the Dow Jones shedding 2.5 per cent and the broader S&P 500 plunging 2.8 per cent.

Analysts admit that the very weak global cues over the weekend would have some impact on the domestic market but it will recover soon.

"The market has been locked in a range in recent days and is looking for clear directions. While good earning growth will help the direction of the market, any positive overseas advice will trigger a rally," Jain said.

Experts believe that investor confidence is upbeat on optimism of strong June quarter results and the benchmark Sensex may close above the psychological 18,000-mark this week.

"Overall, the market sentiment is bullish and the key indices may cross the psychological level on heavy buying. FIIs are also optimistic about the India growth story and will help the Sensex breach the resistance level," Geojit BNP Paribas research head Alex Mathews said.

Last week, the Sensex had touched the 18,000-level for the first time in three months, but was unable to sustain the gains and ended with a marginal jump of 0.69 per cent.

"Investors are keenly watching the quarterly numbers and a good show will help the market post smart gains," Bonanza Portfolio assistant vice-president Avinash Gupta said.

The net investment by overseas investors in the domestic stocks has reached Rs 39,360 crore ($8.6 billion) till July 16, as per the data available with market regulator Sebi.

Brokerage firm CLSA says it is bullish on the Dalal Street for 2010, with robust growth seeing upgrades for a majority of the Asian markets, but cautions that 2011 will be tougher.

According to CLSA, the market is showing some important positives, the US investment cycle, Chinese consumer spending and sustained growth momentum across the Asia-Pacific region.