The market is expected to continue its ongoing rally after settling with gains for the fifth straight year. It finished the calendar year 2006 on a strong note, with the benchmark BSE Sensex gaining 46.7%. It had also struck an all-time high of 14,035.30 on 6 December 2006.
The near term trigger for the bourses is Q3 December 2006 results. Market men expect quarter ended December 2006 to be strong in terms of earnings growth. Strong advance tax payments corroborate the view that Q3 results will be strong. Cement companies and oil firms have paid substantially higher advance tax in the third installment of 15 December 2006. State Bank of India, Tata Steel, Reliance Industries (RIL), Hindalco, L&T, and Cipla have paid substantially higher advance tax in the third installment. The Q3 results will start trickling in from 11 January 2007.
FIIs continued to mop up Indian stocks betting that earnings growth of India Inc will remain strong. The net FII inflow in 2006 totaled $8 billion compared to a record inflow of $10.7 billion in 2005. FIIs mopped up Indian equities notwithstanding concerns about stretched valuations of Indian equities.
Mutual funds bought shares worth a net Rs 11,453 crore for April-December 2006.
BSEL Infrastructure Realty and LML will be announcing their results in the forthcoming week.