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India's market to gain strength from old economy
Monday, 21 October 2002, 19:30 IST
MUMBAI: India's key stock market index is likely to derive strength from the stocks of old economy companies in the coming sessions, as investors bet on the improved quarterly financial performance of these firms.
The corporate earnings season, which was flagged off in style by tech bellwether Infosys Technologies earlier this month, is set to reach a crescendo in the coming week with a host of traditional companies unveiling their financial numbers.
Dealers said that the market would keenly await the July-September quarterly results of old economy heavyweights like consumer goods giant Hindustan Lever and State Bank of India, the country's largest commercial bank.
"In the week ahead, the focus would somewhat shift from technology companies to old economy heavyweights. The quarterly results of the traditional companies would be the flavor of the week," said a fund manager with a brokerage firm.
The market barometer 30-share Bombay Stock Exchange sensitive index or Sensex closed on Friday at 3,009.76, netting a moderate gain of 14 points or 0.47 percent over its previous week's close.
Analysts say the bullish trend on the bourse would continue in the coming sessions on earning inspired institutional buying on selective counters.
"I think what we are seeing now is the beginning of a more sustained rally. We may not see a sharp upward jump from this point in next few sessions but the market will certainly consolidate its gains," said Neeraj Deewan of Quantum Securities.
"The quarterly results and near-term business outlook announced by the technology companies have so far met market expectations. And I don't think the results of blue-chip traditional companies would disappoint the investors.
"So, if we don't get any major negative news in the days ahead, the market would continue its upward journey," Deewan said.
Hindustan Lever Ltd., an Indian unit of the global consumer goods giant Unilever Plc., recently said its growth in the current fiscal would not be impacted by erratic rains in some parts of the country.
A severe drought in large parts of India hit sales of consumer goods and led to concerns that lower rural incomes would hurt corporate earnings in the current fiscal.
In holiday truncated intra-week trade ended Friday, the market opened sharply higher on buying in technology stocks after Infosys boosted investor sentiment with its better-than-expected second quarter results.
Infosys, India's leading software development and services major, last week announced a 12 percent profit for Q2 and raised its sales forecast for the year ending March 31, 2003.
All the major stock exchanges, money markets and financial institutions were closed Tuesday for the Dussehra festival.
The market index, however, slipped in the negative zone Wednesday, snapping a three-day winning streak, as investors rushed to pocket gains on technology counters after the recent bull-run.
The market mood was also affected by the blasts in a nightclub in Bali Saturday that killed at least 187 people, mostly tourists, raising fears of a resurgence of global terrorism.
Shares of state-run companies also came under the hammer after Deputy Prime Minister L.K. Advani ruled out a rethink of the three-month moratorium for privatisation of oil giants Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL).
This appeared to correct a widely held impression that the government had reached an agreement on the formula for divestment of the two companies and was going to implement it soon.
In the old economy sector, Shares of Ranbaxy Laboratories ended the week 2.7 percent down at 
554.15 despite the company posting impressive quarterly financial results in intra-day trade.
Ranbaxy Laboratories, India's top drug maker by sales, Thursday said its net profit in the July-September quarter rose 79 percent over the same period last year on increased product sales in the U.S.
In the tech sector, software giant Wipro gained 1.5 percent over its previous week's close at 1, 438.95.
Wipro Friday projected a positive outlook on rising outsourcing business from overseas clients after posting moderate growth in Q2 net profit.
The company's quarterly profit for the period ended September 30 rose two percent to 2.2 billion, up from 2.16 billion in the same period last year, as its clients stepped up outsourcing to cut costs.
Source: IANS
554.15 despite the company posting impressive quarterly financial results in intra-day trade.
Ranbaxy Laboratories, India's top drug maker by sales, Thursday said its net profit in the July-September quarter rose 79 percent over the same period last year on increased product sales in the U.S.
In the tech sector, software giant Wipro gained 1.5 percent over its previous week's close at 1, 438.95.
Wipro Friday projected a positive outlook on rising outsourcing business from overseas clients after posting moderate growth in Q2 net profit.
The company's quarterly profit for the period ended September 30 rose two percent to 2.2 billion, up from 2.16 billion in the same period last year, as its clients stepped up outsourcing to cut costs.
Source: IANS