Market uptrend may continue: Analysts

Mumbai, June 3: After wrapping the previous week with impressive gains, the domestic bourses are expected to remain bullish this week on a robust growth rate of more than 9 per cent, a taming inflation and northward-bound global indices.

Market analysts are of the view that our capital markets are likely to take cues from global markets in the near term. Domestic bourses have been closely following global bourses since the past two years.

In recent days, a spate of merger and acquisition activity as well as increasing takeover bids have helped many global indices to record highs, they pointed out.

The 30-share BSE Sensex rose 232.30 points or 1.62 per cent to 14,570.75 in the week ended June 1. This was its highest closing in nearly four months since February 9. The S&P CNX Nifty gained 48.90 points or 1.15 per cent to 4297.05, a lifetime closing high.

Traders disclosed that foreign institutional investors (FII) inflow remains healthy on the back of strong global liquidity.

However, there are apprehensions that too much money will lead to inflated prices of assets and cause volatility in asset prices, they cautioned.

There are concerns among some of the market participants that two large initial public offerings (IPOs) - DLF and ICICI Bank, which are slated to hit the market this month, may suck out liquidity from the secondary market. The response to these IPOs also holds key in the near term.

Balkrishna Industries, NOCIL, VIP Industries and Mcleod Russel India will unveil fourth quarterly (Q4) March 2007 results tomorrow. The next day information technology (IT) education major NIIT will unveil Q4 results. On Wednesday PVR, Ispat Industries and BASF India are slated to unveil Q4 results.

AIA Engineering, NRB Bearings and Sundaram Brake Linings will unveil Q4 results on Thursday and Yuken India will declare Q4 results on Friday.

The Q1 June 2007 corporate earnings season will kickstart from about a month and half and, over the next few days, traders are likely to build positions based on Q1 results expectations. The Q4 corporate earnings were strong which had helped trigger a solid surge in domestic bourses since early April this year.

Over the next few months, the progress of the July-September monsoon will hold key to stock movements. The weather office had earlier said in April that this year's monsoon was likely to be 95 per cent of the long-term average, with a five per cent margin of error. The annual monsoon is vital for India's economic health as it is the main source of water for agriculture, which generates more than a fifth of the gross domestic product, market analysts explained.

UNI