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Shares to track key corporate earnings

The Sensex breached the 11,000-mark for the first time in the history of the capital market on March 21.

india Updated: Apr 01, 2006 14:43 IST

India's bluechip equities are expected to closely track the crucial quarterly corporate earnings reports, to be unveiled in the coming weeks, before pouring more money into the booming domestic trading ring.

Market analysts say shares of heavyweight new as well as old companies may continue to inch higher as mutual funds expand their portfolio after the end of the fiscal year 2005-06 on March 31.

The stock market barometer, the 30-share Bombay Stock Exchange sensitive index or Sensex, closed Friday at 11,279.96, representing a gain of 329.66 points or more than three percent over its previous week's close.

The key market index had touched an all-time high of 11,355.83 in the intra-day trade Friday on sustained institutional buying interest in shares of heavyweight new as well as old economy companies.

Analysts say the bull-run in the market in the coming week would be greatly influenced by the financial earnings numbers of blue chip new as well as old economy companies.

A host of heavyweight companies such as Infosys Technologies, Tata Consultancy Services, Associated Cement Companies and Wipro will start unveiling their financial results for the January-March quarter from the week ahead.

"Institutional investors are betting on improved earnings performance of companies on the back of a booming economy," said an analyst with a domestic brokerage firm.

"The financial report cards of new and old economy companies are likely to reflect the bullishness in the overall economy. The positive bias in the trading ring will continue in the days ahead," added the analyst.

A section of dealers, however, said the market rally in the coming sessions might see some correction in the week ahead after touching dizzying heights in the past few sessions.

Massive investments inflows in Asia's second fastest growing economy after neighbouring China on hopes of sustained higher economic growth and corporate earnings is helping the key index to scale new peaks almost on a regular basis.

The Sensex breached the 11,000-mark for the first time in the history of the capital market on March 21.

The historical level was reached in less than six weeks after shares went past the 10,000-barrier on Feb 6. The index rose over 40 percent in 2005 and is already trading nearly 17 percent higher in the current year.

Foreign institutional funds, the backbone of India's liquidity starved capital market, pumped in a record $10.7 billion in the stock market in 2005 and have already bought shares worth over $4 billion in the current calendar year.

Enthused by the surging equity valuations, the overseas funds have invested a whopping $1.5 million in March, compared with February's $1.7 billion, the Securities and Exchange Board of India figures showed.