Markets set to roar in the weeks ahead

Mumbai, May 20: After settling above the 14,300 mark at 14,303.41 last week, the benchmark Sensex is all set to roar on the Bombay Stock Exchange (BSE), buoyed by a taming inflation, predictions of an early monsoon and robust set of results from India Inc.

Similarly, the S&P CNX Nifty Index also breached a major hurdle of 4,200 on the National Stock Exchange (NSE) and is eyeing all time high of 4,245.30 in the week ahead. It now has resistance in range of 4,245-4,280, while support exists at 4,180 and 4,120 range, technical analysts observed.

''The economic fundamentals of India are now far superior to other countries. With liquidity remaining abundant with both domestic and overseas investors turning bullish, the market is likely to test all time highs. Even the strengthening of the rupee is not all that bad and has some distinct advantages like on the import front, especially in the most important crude oil, our import bill can reduce substantially. Hence in a way it is favourable and will lead to full convertibility and help integrate our markets with the global economy,'' market analysts pointed out.

Inflation which has been a concern in the past few weeks, seems to coming in cooling. These will boost the sentiment further. The Reserve Bank of India (RBI) Governor Y V Reddy has kept inflation target of 4.0-4.5 per cent for the medium term.

Market pundits are of the opinion that another key factor to influence the direction of the markets is the progress of the June-September monsoons. The Indian meteorological department forecasted annual monsoon rains would arrive in Kerala on May 24 this year. The weather office said last month that this year's monsoon rains were likely to be 95 per cent of the long-term average, with a five per cent margin of error.

It is pertinent to note here that the annual monsoon is vital for India's economic health as it provides the main source of water for agriculture, which generates more than a fifth of gross domestic product (GDP), analysts noted.

However, on the flip side, brent crude oil prices advanced to strike a fresh eight-month high above USD 70 a barrel, as US refinery problems fanned concerns about potential gasoline supply bottlenecks just before the summer-driving season begins. Any sharp rise from this levels, may dampen the sentiment.

Jindal Steel&Power, Steel Authority of India, Bank of India, Bharat Forge, Punjab National Bank, NIIT Technologies, Bombay Dyeing, BPCL, ITC, Godrej Industries and Bank of Baroda are the major results to be unveiled in the coming week.

Torrent Pharmaceuticals, Alembic, Gokaldas Exports, TV Today Network, Punjab Tractors, New Delhi Television, Divi's Laboratories, Monsanto India, Adani Enterprises, Orbit Corporation, Parsvnath Developers, Everest Kanto Cylinder and City Union Bank will also declare their results this week, analysts added.

UNI