Market may extend winning streak

The market is likely to extend its record breaking winning streak, tracking firm Asian markets. Domestic bourses have been shrugging of negative news. The market edged higher on Monday, 1 October 2007, brushing aside political concerns. Political concerns resurfaced after CPI (M) veteran Jyoti Basu on Saturday, 29 September 2007, ruled out the possibility of any compromise on the issue of Left’s opposition to the Indo-US nuclear deal.

Sensex rose 37.52 points or 0.22% to a record closing high of 17,328.62 on Monday, 1 October 2007. The market was closed on Tuesday, 1 October 2007, on account of Gandhi Jayanti.

Q2 September 2007 results is the next major trigger for the market. Figures of advance tax suggest that earnings will be decent to strong. Stock specific activity may take place in the near term on the bourses ahead of the earnings-reporting season, based on result expectations. IT bellwether Infosys Technologies kickstarts reporting season on 11 October 2007.

The central committee of CPI (M) on Monday, 1 October 2007, authorized the politburo to take legislative measures to prevent the Manmohan Singh government from taking the next step on the Indo-US nuclear deal. The Communists want the government to defer the Indo-US nuclear accord by six months and have warned of a political crisis if it is implemented. The committee set up of the government to look into Left Front’s concerns over the deal is scheduled to hold its next meeting on 5 October 2007.

On the flip side, political turmoil arising from nuke deal will not impact India’s basic economic fundamentals though some infrastructure projects may get delayed. India’s economy is expected to post strong growth for a long period of time mainly due to favourable demographics.

The market has been a roll with the Sensex hitting record high in each of the past nine trading sessions from 19 September 2007 to 1 October 2007. Heavy FII buying and hopes of a further cut interest rates by the US Federal Reserve at its next policy meeting on 30 October 2007-31 October 2007 has boosted bourses. From a low of 13,989.11 on 21 August 2007, Sensex galloped a whopping 3,339.51 points or 23.8% to 17,328.62 on Monday, 1 October 2007.

As per provisional data, FIIs bought shares worth a net Rs 1721.74 crore on Monday, 1 October 2007. Domestic institutions sold shares worth a net Rs 930 crore on that day.

Asian markets extended their recent solid run today, 3 October 2007. Key benchmark indices in Hong Kong, Japan, Singapore and Taiwan were up by between 0.07% to 1.5%.

US blue-chip stocks edged lower on Tuesday, 2 October 2007, as investors booked profits a day after the Dow Jones Industrial Average hit a record high. Dow lost 40.24 points or 0.29% at 14,047.31. But the tech-heavy Nasdaq Composite Index rose 6.12 points or 0.2% at 2,747.11.