The market is likely to extend gains from Friday’ s record high on the back of firm global markets and resumption of FII buying after their recent heavy sales.
FIIs were net buyers to the tune of Rs 159 crore on Thursday 11 January, the day when Sensex had risen 269 points. As per provisional data, FIIs were net buyers to the tune of Rs 397 crore on Friday 12 January, the day when Sensex had spurted 426 points. FIIs were net buyers to the tune of Rs 919 crore in index-based futures on 12 January. They were net buyers to the tune of Rs 86 crore in individual stock futures on that day.
The earnings season has started upbeat with Infosys, HDFC Bank and UTI Bank unveiling strong numbers last week. The key results today are TCS and HCL Tech. Eight brokerages expect a between 4.4% to 13.9% sequential growth in TCS’ December 2006 quarter consolidated net profit as per US GAAP at between Rs 1035.30 crore and Rs 1128.80 crore, compared to a net profit of Rs 991.50 crore in September 2006 quarter. These eight brokerages expect a between 6.2% to 8.2% sequential growth in TCS’ Q3 consolidated revenue as per US GAAP at between Rs 4759.30 crore to Rs 4848.90 crore.
As regards HCL Tech, seven brokerages have forecast a between 1.1% to 6.6% sequential growth in HCL Tech’s consolidated US GAAP net profit in December 2006 quarter at between Rs 253 crore to Rs 266.80 crore, compared to a net profit of Rs 250.20 crore in September 2006 quarter. These seven brokerages expect a between 3.3% to 7.9% sequential growth in HCL Tech’s consolidated US GAAP revenue in December 2006 quarter at between Rs 1425.20 crore to Rs 1488.60 crore compared to revenue of Rs 1379.50 crore in September 2006 quarter
Industrial production rose 14.4% in November 2006 from a year earlier, far higher than market expectations due to a strong surge in manufacturing output, government data showed on Friday. Output growth for October 2006 was revised down to an annual 4.4%, from a previously reported 6.2%. Manufacturing production, which represents more than 75% of industrial output, rose 15.7% in November from a year earlier, compared with a provisional 6% annual growth in October.
On the flip side, inflation rose further as per latest data. Data on Friday showed inflation rising at 5.58% in the 12 months to 30 Dec 2006, higher than previous week's annual rise of 5.48% due to a rise in food and fuel prices, data showed on Friday. The figures were slightly lower than estimated 5.6%.
Asian stocks climbed on Monday led by technology issues, encouraged by strong data on Japanese machinery goods orders, US retail sales and encouraging company results. The Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up by between 0.06% to 0.9%.
US stocks rose for a third day on Friday, driving the Dow to another record high as energy shares rebounded with oil prices and data showing surprisingly robust December retail sales underscored optimism about economic growth. US retail sales grew in December at the fastest pace since July. The Dow Jones industrial average rose 41.10 points, or 0.33 percent, to end at 12,556.08. The Standard & Poor's 500 Index advanced 6.91 points, or 0.49 percent, at 1,430.73. The Nasdaq Composite Index was up 17.97 points, or 0.72 percent, at 2,502.82.
Benchmark US crude oil futures rose 24 cents to $53.23 a barrel in Globex electronic trading on Monday, extending gains from Friday as traders price in the risk that OPEC will cut supply to try to arrest a price slide of about 15 percent since the start of the year.