Market may extend recent solid gains tracking firm global cues

The key benchmark indices may open in green extending recent solid surge tracking gains in most of Asia and strong surge in US stocks overnight. Encouraging Q1 results by India Inc may also support market. However, profit taking may not be ruled out considering the recent sold gains in indices.

The key benchmark indices clocked strong gains, on Monday, 20 July 2009 extending last week's sharp climb, as encouraging Q1 June 2009 results from India Inc and firm global stocks boosted sentiment. The BSE 30-share Sensex rose 446.09 points or 3.03% to 15,191.01. The barometer indices struck its highest closing in more than a month. From a recent low of 13,400.32 on 13 July 2009, the Sensex has risen 1,790.69 points or 13.36% in five trading sessions.

As per the provisional; figures on NSE, foreign funds bought shares worth Rs 563.20 crore and the domestic funds bought shares worth Rs 151.85 crore on Monday.

Lower costs have helped India Inc report Q1 June 2009 results. The combined net profit of 216 companies rose 45.5% Rs 11,288 crore on 10.2% growth in sales to Rs 83,441 crore in Q1 June 2009 over Q1 June 2008. Wipro, Banco Produsts India, Binani Cement, Chambal Fertilisers and Chemicals, Renuka Sugars, Ultratech Cements, Zuari Industries among others will announce their quarter ended June 2009 result today.

Most Asian stocks were trading higher today after a firm start after Goldman Sachs Group Inc. raised its estimate for the U.S. Standard & Poor's 500 Index. The key benchmark indices in Singapore, Taiwan, Japan and South Korea rose by between 0.12% to 1.35%. The key benchmark indices in China and Hong Kong fell by between 0.28% to 0.41%.

U.S. stocks rallied on Monday, pushing the S&P 500 to an eight-month closing high, after CIT Group Inc was thrown a lifeline to avoid bankruptcy, and investors bet corporate America would log another strong set of earnings this week.. The S&P 500 index closed at its best levels of the year and at 8-month highs above the psychologically important level of 950.This is after the Goldman Sachs has raised its year-end target for the index to 1,060 from 940.

The Dow gained 104.21 points, or 1.2%, to 8,848.15. The S&P 500 index rose 10.75 points, or 1.1%, to 951.13 and the Nasdaq Composite Index added 22.68 points, or 1.2%, to 1,909.29.

The extra boost to the rally also came from the June 2009 leading indicator. The data was better than expected at 0.7%. This marked the third straight monthly increase, which has, however, come at a slower pace than the increases for April and May.

Back home, progress of India's annual monsoon may concern investors. The government on Monday said it will prepare a "back up" plan to neutralise the impact of truant monsoon on agriculture and the country's economic growth. Finance Secretary Ashok Chawla said, the Centre and state governments are trying to ensure adequate supply of power and diesel for farmers to help them exploit ground water resources to the maximum. As regards assessment of the monsoon situation, the Finance Secretary said, It continues to be a problem in some parts of central India and parts of north west India. Spatial distribution and actual rain during July and August are vital to determine its consequences on overall economy. Indian Meteorological Department has already predicted 98% of normal monsoon during August.