Uptrend may continue

The domestic bourses are likely to take cue from global markets in the near term. Domestic bourses have been closely following global bourses since the past two years. In recent days, a spate of merger and acquisition activity as well as increasingly eye-popping takeover bids have helped propel many global indices to record highs.

FII inflow remains healthy on the back of strong global liquidity. However, there are apprehensions that too much money will lead to inflated prices of assets and cause volatility in asset prices.

There are concerns among some of the market participants that two large IPOs - DLF and ICICI Bank, which are slated to hit the market this month, may suck out liquidity from the secondary market. The response to these IPOs also holds key in the near term.

Balkrishna Industries, NOCIL, VIP Industries and Mcleod Russel India will unveil Q4 March 2007 results on Monday 4 June 2007. The next day IT education major NIIT will unveil Q4 results. On Wednesday, 5 June 2007, PVR, Ispat Industries and BASF India are slated to unveil Q4 results.

AIA Engineering, NRB Bearings and Sundaram Brake Linings will unveil Q4 results on Thursday, 7 June 2007 and Yuken India will declare Q4 results on Friday, 8 June 2007.

The Q1 June 2007 corporate earnings season will kickstart from about a month & a half and, over the next few days, traders are likely to build positions based on Q1 results expectations. The Q4 corporate earnings were strong which had helped trigger a solid surge in domestic bourses since early April 2007.

Over the next few months, the progress of the July-September monsoon will hold key. The weather office said in April 2007 that this year’s monsoon was likely to be 95% of the long-term average, with a 5% margin of error. The annual monsoon is vital for India’s economic health as it is the main source of water for agriculture, which generates more than a fifth of the gross domestic product