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Markets Outlook: Earning inspired rally to continue
Monday, 14 October 2002, 19:30 IST
MUMBAI: Indian stock market investors will continue to take a cue from the torrent of corporate earnings results, especially of the companies from the technology sector, in the week ahead.
The corporate earnings season, which was flagged off last week in style by tech bellwether Infosys Technologies, is set to reach a crescendo in the coming week with a host of blue-chip companies unveiling their financial numbers.
Analysts say that the revenue outlook of the leading technology companies for the current fiscal year would also determine the market mood in the days ahead.
"More than the earning figures for the last quarter, the investors are waiting for the near-term revenue projections of the heavyweight software companies," said a fund manager with a foreign brokerage firm.
"The trading pattern in the coming week will completely be determined by the results of the key traditional and technology companies. Overall, I think the bullish sentiment will continue to prevail on the bourses," the manager said.
A section of dealers, however, feel that the recent negative news on the economy front will crimp the market rally in the days ahead.
India's economic growth in the coming quarters could be hit by the country's worst drought in 15 years and a sharp slowdown in demand for consumer goods, said a study report Friday.
"The good news coming from the GDP (gross domestic product) figures for the first quarter of the current fiscal year may not be sustainable," said the report prepared by the Institute of Economic Growth (IEG).
India's GDP expanded by a better-than-expected six percent in the April-June quarter of 2002-03, boosted by strong services and farm sector growth. The economy grew 3.5 percent in the first quarter of 2001-02.
The farm sector grew 4.4 percent compared with 1.1 percent in the first quarter last year, while the services sector registered a higher growth of 7.6 percent compared with 5.7 percent in the same period of fiscal year 2001-02.
While the government expects the economy to grow by 5.5 percent in the year to March 2003 up from 5.4 percent in the previous year, analysts say higher growth rate would be restricted by the low farm sector output following drought situation.
In the intra-week trade ended Friday, the market opened sharply higher on hopes that the fragile privatization process would be put on the fast track after Prime Minister Atal Bihari Vajpayee threw his weight behind the gasping reform process.
Vajpayee's assertion last weekend on continuance of reform process is likely to silence the squabbling ministers over the privatization of blue-chip public sector companies, say analysts.
The prime minister told a daily that India's privatization process was "on track and irreversible."
Vajpayee's comments are likely to reassure those who feared that India's decade-old economic reforms had been put on hold last month when he imposed a three-month freeze on further privatization.
The government is banking on the stalled disinvestments process to generate 
780 billion over the next five years towards meeting the gross budgetary support along with $7.5 billion annually through foreign direct investment.
The market mood was also buoyed by reports that the government had short-listed 15 bidders, including a number of foreign investors, for the strategic sale of National Aluminium Company Ltd. (NALCO).
According to officials, due diligence of the country's second-largest aluminium maker by potential buyers is slated to commence within three weeks.
After slipping lower briefly in the intra-week trade, the market index bounced back with a vengeance, encouraged by a better-than-expected quarterly result announced by Infosys Technologies.
Infosys, India's leading software development and services major, Thursday announced a 12-percent profit in the July-September quarterly period and raised sales forecast for the year ending March 31, 2003.
The net profit of Infosys, the country's largest listed software exporter, touched 2.26 billion in the quarter ended September 30, up from 2.01 billion in the same period last year, helped by more outsourcing orders from overseas clients.
Analysts say the Infosys' quarterly financial numbers and future revenue guidance have come as a "positive trigger" for investors who had adopted a wait-and-watch approach after the government's ambitious reforms process came under criticism.
Shares of Infosys rose 7.5 percent over its previous week's close to 3,761.25 on fresh institutional buying.
State-run Hindustan Petroleum Corporation Ltd. (HPCL) gained a whopping 20.5 percent to touch 217 on hopes that the refining major's stalled divestment may be revived soon.
The HPCL stock had tumbled over 30 percent in the past one month after the government deferred a decision to privatise the company by three months on opposition from within the ruling National Democratic Alliance.
Source: IANS
780 billion over the next five years towards meeting the gross budgetary support along with $7.5 billion annually through foreign direct investment.
The market mood was also buoyed by reports that the government had short-listed 15 bidders, including a number of foreign investors, for the strategic sale of National Aluminium Company Ltd. (NALCO).
According to officials, due diligence of the country's second-largest aluminium maker by potential buyers is slated to commence within three weeks.
After slipping lower briefly in the intra-week trade, the market index bounced back with a vengeance, encouraged by a better-than-expected quarterly result announced by Infosys Technologies.
Infosys, India's leading software development and services major, Thursday announced a 12-percent profit in the July-September quarterly period and raised sales forecast for the year ending March 31, 2003.
The net profit of Infosys, the country's largest listed software exporter, touched 2.26 billion in the quarter ended September 30, up from 2.01 billion in the same period last year, helped by more outsourcing orders from overseas clients.
Analysts say the Infosys' quarterly financial numbers and future revenue guidance have come as a "positive trigger" for investors who had adopted a wait-and-watch approach after the government's ambitious reforms process came under criticism.
Shares of Infosys rose 7.5 percent over its previous week's close to 3,761.25 on fresh institutional buying.
State-run Hindustan Petroleum Corporation Ltd. (HPCL) gained a whopping 20.5 percent to touch 217 on hopes that the refining major's stalled divestment may be revived soon.
The HPCL stock had tumbled over 30 percent in the past one month after the government deferred a decision to privatise the company by three months on opposition from within the ruling National Democratic Alliance.
Source: IANS