Markets Weekahead - Enough positive cues for Indian shares to ignore interim budget

(Reuters Market Eye) - Low expectations from the interim budget, stable inflation data, positive foreign flows and December-quarter results are strong enough cues for markets to rise even if the budget does not surprise positively.

Finance Minister P. Chidambaram will present an interim budget on Monday at 0530 GMT for 2014/15 fiscal year, ahead of national elections due in the next three months.

"Markets will try to understand the contours of the fiscal deficit, which is likely to be pegged at below 4.8 percent. Moreover, any indirect-tax benefit to any sector may have an impact on the corresponding stock prices," said Dipen Shah, Head of Private Client Group Research, Kotak Securities.

Sequential improvement in Indian companies' profits for October-December implies earnings would now become a tailwind, supporting shares, than a headwind as in the past, analysts say.

Foreign flows would remain on the watch after overseas investors turned buyers for two consecutive sessions till Thursday, after earlier snapping their nine-day selling streak till Tuesday in secondary share market.

Holders of pharmaceutical shares keenly await U.S. Food and Drug Administration commissioner's news conference in Mumbai on Tuesday after her interactions with the local regulator as well as pharmaceutical company executives.

GlaxoSmithKline Plc's (GSK) share tender offer of $1 billion to raise its stake in the Indian unit, GlaxoSmithKline Pharmaceuticals , will start on February 18 and end on March 5, the manager to the offer said in a notice to the exchanges on Monday.