Uptrend may continue

The season of earnings reportage has just began. Q4 results are expected to remain strong. Stock-specific buying is likely to continue during the earnings season. Analysts will be closely watching what company managements say about the outlook for the current financial year (FY 2008).

On 24 April 2007, the Reserve Bank of India (RBI) will announce an Annual Policy Statement for FY 2007-08. There are concerns among market men that interest rates may go up further since inflation remains above the RBI’s target range of 5 - 5.5%. Higher interest rates raise borrowing costs and impact corporate profits.

Global liquidity still remains strong. It has helped global markets recover quickly from recent steep corrections. However, there are concerns that too much money will lead to inflated prices of assets and volatility.

The key Q4 results scheduled next week are TCS, HCL Tech and Wipro. TCS announces results on 16 April, followed by HCL Tech on 17 April and Wipro on 20 April.

The board of Tata Steel meets on 17 April 2007, to consider proposals for raising equity funds to finance its investment in a special purpose vehicle (SPV) for the acquisition of steel maker Corus Group.