Key Q4 results to dictate trend

The earnings season has started on a positive note. The market surged last week after Infosys gave a decent guidance for the year ending March 2009 on 15 April 2008. However, high inflation and rising crude oil is a cause for concern for the market in the near term. On the global front, good results/guidance from Intel Corp, JPMorgan Chase & Co and other blue chips eased worries that weak US economy would sap corporate profits.

Q4 March 2008 results of India Inc. will dictate the near term trend on the bourses. Analysts will be closely watching what the company managements have to say about the outlook for the year ending March 2009 (FY 2009). Analysts will also scrutinize disclosures that companies may make regarding foreign exchange derivatives products that they have bought on the advice of their bankers. A steep decline in the value of the US dollar against the Japanese Yen and the Swiss Franc hit Indian corporates which have used these two currencies (Yen and Franc) extensively to swap their rupee denominated debt.

Morgan Stanley expects 23% growth in net earnings of 104 out of 108 firms in its Indian coverage universe in Q4 March 2008 over Q4 March 2007.

Q4 March 2008 results of Sensex heavyweights like Wipro, Tata Consultancy Services, Satyam Computer Services, Grasim Industries, Reliance Industries, Maruti Suzuki India, HDFC Bank and Bharti Airtel are due next week.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries is expected to report strong Q4 March 2008 results boosted by robust refining margins.

Infosys has given guidance of a between 16.3% to 18.3% growth in earnings per share (EPS) to between Rs 92.32 to Rs 93.92 for the year ending March 2009 over the year ending March 2008. It has given guidance of a between 19.2% to 21.1% growth in revenue to between Rs 19894 crore to Rs 20214 crore for the year ending March 2009 over the year ending March 2008.

As per US GAAP, Infosys has given guidance of a 16.7% to 18.7% growth in earnings per American Depository Shares at between $2.31 to $2.35 for the year ending March 2009 over the year ending March 2008. It has given guidance of a between 19% to 21% growth in revenue as per US GAAP to between $4.97 billion to $5.05 billion for the year ending March 2009 over the year ending March 2008.

India's monsoon rains are likely to be near normal this year, the Indian Meteorological Department (IMD) forecasted on Wednesday, 16 April 2008, promising robust harvests which could bolster growth in the country and soothe global food worries.

Earth sciences minister Kapil Sibal said this year's forecast should be more reliable as the IMD was using a combination of statistical and dynamic models, unlike earlier when only statistical models were applied.

In the calendar year so far, FIIs sold shares worth a net Rs 11720.90 crore (till 15 April 2008), to offset their huge losses in the US sub-prime mortgage market.

Meanwhile, a weaker dollar and a surprise drawdown in US crude inventories sent Nymex crude futures to a new intraday record of $115.07 per barrel on Wednesday, 16 April 2008.

The wholesale price index rose 7.14% in the 12 months to 5 April 2008. This was slower than the previous week's annual rise of 7.41%. government data showed on Friday, 17 April 2008.

Securities & Exchange Board of India (Sebi), had said short selling and securities lending and borrowing will be operationalised from 21 April 2008.

The market remains closed on Friday, 18 April 2008, on account of Mahavir Jayanti.