Gains in global markets and foreign buying helped Sensex move past 17,000 mark after 15 months. In a truncated week, BSE Sensex rose 440 points or 2.6 per cent to 17,135 and Nifty rose 125 points or 2.5 per cent to 5,083. Broader indices performed better than BSE Midcap and BSE Smallcap indices, each delivering 1.2 per cent and 1.8 per cent, respectively. The market was buoyed by IMF's statement that India’s GDP would grow at 6.4 per cent for CY09 and that the world economy would contract less than expected.
After a subdued first quarter, optimism about stronger September quarter results would help markets reach higher levels, say analysts. The markets would be keenly awaiting the announcement of Infosys results on October 9. However, markets are expected to take a cue from global stocks also.
A reasonably good debut of Oil India on the bourses may give a filip to government's divestment plans. FII pumped around Rs 20,000 crore into the markets in the month of September and continuing the trend, invested a further Rs 2,600 crore in the last two days of the month. Further investments will help keep indices steady at current levels.
Stock to watch INFOSYS TECHNOLOGY
Last week's close (Rs) 2,331.25 Prev. week's close (Rs) 2,242.90 Week's high (Rs) 2,347.45 Week's low (Rs) 2,262.00 Last week's ave. daily turnover (Rs cr) 313.82 Prev. week's ave. daily turnover (Rs cr) 686.49 Number of up/down move 3/0
The results season will kick-off with IT major Infosys scheduled to announce its second quarter results on October 9. A pick-up in demand from the BFSI segment and lower project cancellations would see the company outperform its own flat guidance, say analysts. Infosys is expected to report sequential revenue growth of 3-3.5 per cent versus flat revenue guidance and a sequential decline of 1.5-2 per cent in net profit.
The operating profit margins could see a drop of around 100 basis points q-o-q to 33 per cent due to rupee appreciation and higher sales and marketing costs. Any positive surprises could cheer the market. The stock is trading at 22 times its trailing 12-month EPS of Rs 105.
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