Sensex crosses 4,500 points

Indian investors are keeping a close watch on the first batch of quarterly earnings results, led by technology bellwether Infosys Technologies, to be released this week.

Expectations have soared following a slew of good economic data coupled strong inflow of funds from foreign institutional investors.

"Market fundamentals remain strong. With the Sensex crossing the crucial 4,500 level last week, we expect the benchmark index to touch 4,800 points by the end of this year," said head of a domestic mutual fund in Mumbai. He said strong second quarter numbers due this month would add further strength to the market.

The Sensex closed last week at 4,552.92 points, up 3.9 per cent on the week. On the National Stock Exchange, the Nifty index gained 4.5 per cent to finish at 1,449.30 points.

Indian shares continued to outperform other global markets last week with the key benchmark index jumping to a near 37-month high, backed by sustained foreign fund buying in blue-chip stocks.

The inflow of funds from foreign institutional investors has crossed the $4 billion mark as of Thursday, reflecting a positive attitude towards Indian bourses.

With last week's rise, the Sensex has gained a whopping 55 per cent from the low of 2,932.34 points recorded in April this year. The undertone remained positive on hopes of strong quarterly results, which start pouring in this week.

Technology counters are expected to be in the limelight with Digital GlobalSoft and Mphasis BFL unfolding their second quarter numbers this week. Investors are keeping their fingers crossed as the index heavyweight Infosys Technologies is due to announce its figures on Friday.

Traders and analysts expect better guidance from IT majors despite a sharp appreciation in the rupee value. The Indian rupee has risen over one per cent against the greenback last week, taking gains for the year to 5.7 per cent. A strong rupee could eat into the profits of software services companies that depend on the US for more than 70 per cent of their revenues.

Investors in Oil PSUs have heaved a sigh of relief after the Cabinet Committee on Divestment has decided to go ahead with the divestment agenda and put on the block IOC. The committee has also decided to split IOC and privatise a major chunk of its retail network while exploring all options to resolve the logjam on HPCL and BPCL divestment.

The market is expected to get further boost after the Indian economy has posted a robust 5.7 per cent growth in the first quarter of the current fiscal year, led by a 6.4 per cent growth in the manufacturing sector.