Among expectations of good Q1 results, equity markets cheered this week with gains of 2.1% or 373 points for the week to close at 17,833 following a 0.6% loss last week.

Markets had lots of good news this week. IMF raised the projections for Indian growth rate for the year 2010 to 9.5% citing reasons like favourable financing conditions and robust corporate profits to drive expansion. For the year 2011, the forecast has been kept at 8.5%.

Progress of monsoon has been closely watched. IMD announced that monsoon has covered the whole of India about 10 days before schedule was taken favourably by the markets. Southwest monsoons are important for the agricultural sector of the economy as well is instrumental in containing the food prices which have been cause of concern since last year when monsoon was deficient.

Telecom sector saw considerable upside this week after a rating upgrade by Credit Suisse. A note from Credit Suisse said that concerns on competition, regulation, 3G auction fee and RIL’s entry have been overstated. Bharti Airtel rose 16.6% for the week.

Sugar sector gained after comments from Sharad Pawar regarding decontrolling the sugar prices.

Expectations of good Q1 numbers from companies are also driving the prices. Advance tax numbers have hinted at robust earnings.

Companies will start releasing Q1 results from next week onwards. Most of the good news has already been factored in the prices. Any results above the estimates will lead to more gains in the respective stocks. Two most important numbers from Govt viz IIP and monthly inflation figures will be released next week and will be closely watched.

To read earlier equity updates, click here

Author: Praveen Bajaj

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