Ahead of an expected strong fourth-quarter results and buoyed by the favourable US jobs data, the National Stock Exchange’s Nifty on Monday registered its highest one-day gain of 1.5 per cent, or 78 points, in the last one month to close at a 26-month high of 5,368.
The Sensex, too, registered its highest gain of 1.4 per cent or 243 points in the last one month to close at a new 25-month high of 17,935. It was a broad-based rally as the Bombay Stock Exchange’s (BSE’s) mid-cap and small-cap indices also rose by 1.5 and 2 per cent, respectively.
Foreign institutional investors out in Rs 1,484 crore on Monday.
Though analysts expect a strong fourth quarter for domestic companies, it was the US jobs data (released on Friday) that lifted markets worldwide on Monday. In March, The US posted the highest job gain in the past three years.
The fourth-quarter results will kick start beginning April 13 after Infosys comes out with its results, crucial in an environment where the rupee is strengthening against the dollar.
“Next years guidance will be keenly watched for a trigger to the markets,” said Anup Bagchi, executive director, ICICI Securities.
Analysts are expecting strong numbers for the period between January 2010 and March 2010 due to a low base factor, lower input cost and rise in demand.
“I am expecting a 25 per cent growth rate for Sensex firms and a lower input cost in the quarter will help profits grow,” said Aseem Dhru, chief executive officer, HDFC Securities.
“I think the earnings growth for the fourth quarter could be close to 25-30 per cent on an year-on-year basis,” said
Anup Maheshwari, head of equity and corporate strategy at DSPBR Mutual Fund.
In the previous three quarters of 2009-10, Sensex companies saw their profits growth rates rise.
“Metals are expected to come with strong results along with automobile and banks,” said Maheshwari.
While experts expect this to grow further, they also put in a word of caution. “There is pressure on commodities and interest rate, which may pressurise growth rates,” said Alex Mathews, head of research at Geojit BNP Paribas Financial Services.