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Monsoon worries, bluechip earnings to drive stock mkts this wk

Press Trust of India/New Delhi 05 Aug 12 | 11:21 AM

Corporate results of bluechips including those of Bharti Airtel and SBI, coupled with worries over deficient monsoon rains will drive the stock markets this week, experts said.

Besides, some investors are hoping for speedy execution of economic reforms following P Chidambaram's becoming the Finance Minister, they added.

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"Within the country, below average monsoon will reduce rains in the coming months. This may lead to near-drought conditions and market sentiment is likely to be affected because of this," Rakesh Goyal VP Bonanza Portfolio said.

"Consolidation may be likely in coming week for Nifty between 5,145-5,300 levels, while the market decides for further trend direction," he added.

Rains are expected to be 15% deficient this monsoon, the weather office had said, the first indication of a drought in three years that is likely to push down the GDP growth to 6% this fiscal.

The country has received 20% less rains than normal since the delayed onset of monsoon in June.

"It is unlikely that the rains will pick up as the probability of an El Nino effect occurring between August 2012 and March 2013 has risen, which typically leads to less rainfall.

"Moreover, rains in July, the most critical month for food production, have been about 18% below normal levels - so even if heavier rains do fall, food production will still most likely be affected," Sonal Varma of Nomura said.

A section of the market, meanwhile, is betting on speedier execution of economic reforms after Chidambaram has returned to head the Finance Ministry, said analysts.

"Market will open positive and rally will sustain. SBI result may ignite some buying interest. FIIs bought over Rs 10,000 crore last month and the momentum is likely to continue. Market is also waiting for some positive feelers from the new Finance Minister," CNI Research CMD Kishore Ostwal said.

Among major corporate results slated for this week are DLF, SAIL, Oil India, Mahindra & Mahindra, Bharti Airtel, Ranbaxy, IOC, SBI and Sun Pharma.

The US markets, meanwhile, may provide some thrust to buying in equities. The American economy added as many as 1.63 lakh new jobs in July, although the unemployment rate did rise marginally to 8.3%.

US stocks settled higher on Friday which may lead to positive openings in the domestic bourses, experts said.

Market will also monitor the monsoon session of Parliament that is beginning on Wednesday.

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Company Price Gain (%)
Reliance Inds.1,015.451.99
Yes Bank335.451.53
Axis Bank524.401.48
Bharti Airtel375.601.20


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