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Tech firms' results to boost Indian market in week ahead

MUMBAI — India's blue chip equities are likely to stay firm in the coming sessions on better than expected quarterly earnings, likely to be announced by heavyweight technology companies in the week ahead.

Leading software makers such as Infosys Technologies and India's largest software exporter Tata Consultancy Services will unveil their July-September quarterly financial results in the coming week.

Analysts and market traders say the overall sentiment on the bourses in the week ahead will also be influenced by the trading patterns in overseas stock exchanges and flow of foreign fund investments into the domestic market.

The stock market barometer, the 30-share Bombay Stock Exchange sensitive index or Sensex, closed Friday at 8,491.56, a loss of 142.92 points or 1.66 per cent from its previous week's close.

The stock market closed in the negative zone for the week ended Friday after surging sharply higher in the previous week. The market index had touched a new record high of 8,766.37 on Tuesday on across the board buying interest.

The benchmark index had been touching record levels till early last week regularly since it breached the 7,000-level in June, making it one of the best performing markets globally.

India's blue chip equities has soared sharply in the past few months on massive inflows of overseas funds and hopes that a normal monsoon would boost economic growth in the current year.

"With India's two leading technology companies kickstarting the quarterly earnings season next week, there is lot of optimism inside the trading ring," said an analyst with a domestic brokerage firm.

"Taking into account the new contracts bagged by the software companies in the recent months, the financial numbers are likely to exceed investors' expectations," added the analyst.

"The technology stocks haven't had a great run on the bourses in the recent past despite the sustained bull run. The financial results may help the software shares to outperform the market."

Experts say the trading pattern in the coming week would also be influenced by the flow of foreign institutional investments, termed as the backbone of India's liquidity hungry equity market, into the domestic trading ring. Overseas funds have invested over $8.6 billion in Indian equities in the current year so far, up from $8.5 billion invested in the whole of 2004, betting on robust economic growth in the current fiscal year. In the intra-week trade ended Friday, the stock market opened Monday on a positive note with hopes of robust corporate earnings performance propelling the key index to a new all-time high. The bull-run continued in the following session with the index breaching the 8,700-level for the first time in the history of the Indian capital market.