Monsoon forecast may help equities extend gains

Forecast of a normal monsoon this year may help stocks extend gains next week. But, volatility may rise as traders roll over positions in the derivatives segment from the April 2010 series to the May 2010 series ahead of the expiry of the near-month April 2010 contracts on Thursday, 29 April 2010.

Shares of India's biggest private sector firm by market capitalization and oil refiner Reliance Industries (RIL) will on Monday, 26 April 2010, react to the fourth quarter March 2010 results which the firm announced after trading hours on Friday, 23 April 2010. Net profit rose 19% to Rs 4710 crore on 120.7% growth in net turnover to Rs 57570 crore in Q4 March 2010 over Q4 March 2009.

ICICI Bank and HDFC Bank will also be in focus early in the week after the two private sector banks unveil fourth quarter and year ended March 2010 results on Saturday, 24 April 2010. Among major results due next week include Maruti Suzuki and Sterlite Industries on Monday, 26 April 2010, Infrastructure Development Finance Company (IDFC) on Tuesday, 27 April 2010, Bharti Airtel on Wednesday 28 April 2010, Siemens on Thursday 29 April 2010 and ABB and Reliance Capital on Friday 30 April 2010.

The results announced so far show that the combined net profit of a total of 161 companies rose 32.7% to Rs 12534 crore on 36.7% rise in sales to Rs 98684 crore in the quarter ended March 2010 over the quarter ended March 2009.

The initial public offer of Jaypee Infratech, which has undertaken the Yamuna Expressway project, opens for bidding on 29 April 2010. The company has fixed the price band of the initial public offer (IPO) at Rs 102-117 per share.

Meanwhile, the Indian Meteorological department (IMD) expects normal rainfall in the June-September monsoon season this year. Rainfall is likely to be 98% of the long-term average, it said. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation. The south west monsoon is important for India as about 60% of the country's farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector. The quantum of rainfall in the crucial sowing month of July and distribution of rainfall during the monsoon season holds key.

On the global front, the US Federal Reserve is expected to surprise no one on Wednesday, 28 April 2010, by holding interest rates near zero and repeating its vow of an extended period of very low rates at the conclusion of a two-day policy meeting.

The Greek government surrendered to the credit markets on Friday, 23 April 2010, formally requesting the activation of a joint European Union-International Monetary Fund rescue plan after soaring borrowing costs were seen making it virtually impossible for the debt-strapped nation to meet its funding needs on the open market.