Indian shares likely to hit record highs on earnings data optimism
Monday, 10 September 2007
MUMBAI, Sept 9 (AFP): Indian share prices may hit record highs this week on optimism about corporate earnings data due out next month, dealers said Friday.
For the week to September 7, the Mumbai stock exchange's 30- share benchmark Sensex index rose 1.77 per cent or 271.82 points to 15,590.42.
The markets rose on renewed fund buying and hopes that the US Federal Reserve may cut interest rates from 5.25 per cent to ease subprime credit crunch problems. The US Federal Reserve meets next on September 18.
"The Indian markets are showing signs of decoupling from the US subprime housing factor. Quarterly earnings are a trigger which could see buying improve," said Manish Sonthalia, vice president of equity strategy at brokerage Motilal Oswal Securities.
The market also rose on improved 9.30 per cent economic growth in the first quarter as industry and services expanded strongly.
The price data showed inflation slipped to a 16-month low of 3.79 per cent for the week ended August 25, down from 3.94 per cent the previous week, and well under central bank targets.
Analysts, however, say that inflation levels may rise towards the year-end.
"There is a question mark over whether low inflation will sustain. Emerging markets still face pressure from externally generated liquidity," said Manika Premsingh, economist at brokerage Edelweiss Securities.
Analysts said investors were also now looking at the next set of quarterly results due in October after previous earnings figures turned out to be better than expected.
At Friday's close, the Sensex was down 1.29 per cent from its record close of 15,794.92 on July 24.
Overseas funds have invested 8.98 billion dollars in Indian equities this year, more than twice the 4.18-billion-dollar level for the same period last year.
For the week to September 7, the Mumbai stock exchange's 30- share benchmark Sensex index rose 1.77 per cent or 271.82 points to 15,590.42.
The markets rose on renewed fund buying and hopes that the US Federal Reserve may cut interest rates from 5.25 per cent to ease subprime credit crunch problems. The US Federal Reserve meets next on September 18.
"The Indian markets are showing signs of decoupling from the US subprime housing factor. Quarterly earnings are a trigger which could see buying improve," said Manish Sonthalia, vice president of equity strategy at brokerage Motilal Oswal Securities.
The market also rose on improved 9.30 per cent economic growth in the first quarter as industry and services expanded strongly.
The price data showed inflation slipped to a 16-month low of 3.79 per cent for the week ended August 25, down from 3.94 per cent the previous week, and well under central bank targets.
Analysts, however, say that inflation levels may rise towards the year-end.
"There is a question mark over whether low inflation will sustain. Emerging markets still face pressure from externally generated liquidity," said Manika Premsingh, economist at brokerage Edelweiss Securities.
Analysts said investors were also now looking at the next set of quarterly results due in October after previous earnings figures turned out to be better than expected.
At Friday's close, the Sensex was down 1.29 per cent from its record close of 15,794.92 on July 24.
Overseas funds have invested 8.98 billion dollars in Indian equities this year, more than twice the 4.18-billion-dollar level for the same period last year.