New Peak in the new quarter

After stock markets finished the first three months of the fiscal on a bullish note, bulls on Dalal Street are looking for a new peak when the benchmark Sensex opens for trading on the first day of the second quarter tomorrow.

The Bombay Stock Exchange's 30-share barometer index gained 145 points on Friday to settle at 14,650.51 – less than 75 points away from its all-time high of 14,723.88 scaled nearly five months ago on February 9.

The index had hit an intra-day high of 14,663.25 points on the last trading day of the first quarter, missing its record high by just 60 points.

Besides, the index is barely two points away from its all-time closing high of 14,652.09, hit on February 8.

The 50-share Nifty of National Stock Exchange scaled a new closing peak of 4,318.30 points and is just 45 points away from its all-time intraday high of 4,362.95, struck on June 4.

The Sensex gained 17.6 per cent in the first quarter, while the gain was 18.8 per cent in Nifty during the same period.

The market observers believe that regaining this peak should not be a far-fetched conclusion early this week, as the market is expected to start factoring in expectations for March-June quarter earnings results, which are scheduled to start pouring in by the second week of July.

However, it remains to be seen whether the market manages to sustain at its higher levels, as earnings of IT firms, which are among the first ones to publish their results, are not expected to be exceptionally robust this time around due to the sharp depreciation in the US dollar.

The IT companies gather a major part of their earnings from overseas markets and a weak dollar adversely affects their results.

The market analysts are keeping their fingers crossed on June quarter earnings season, which will be kick-started by it bellwether Infosys Technologies on July 11.

Besides, the impact of rupee appreciation, high interest rates and skyrocketing wages could also upset the applecart of IT firms.

However, some market observers expect some boost to the sentiments from the latest government data showing a further decline in the inflation rate, which has fallen within the RBI's medium-term inflation target of 4.0-4.5 per cent, from a high close to six per cent in recent past.

The steady progress of monsoon so far is also being accounted for the expected sustained rally on the bourses.