Robust GDP, global recovery to drive Mkts further up: Analysts

Last Updated: Monday, November 30, 2009 - 18:43

Mumbai: The stock markets on Monday shrugged off
the Dubai hiccups and ended the days almost two percent
higher, and analysts believe the momentum is likely to
continue as the street will take positive cues from the robust
economic growth, as well as global rally.

The economy grew by a robust 7.9 percent in the
September quarter, propelled by increased government spending
and surge in the manufacturing sector.

"The GDP figures are higher compared to market
expectations. If the third quarter figures continue to hold
above seven per cent, then overseas investors may increase
their asset allocation in stocks here," Taurus Mutual Fund
managing director RK Gupta said.

Analysts feel buoyed by good growth across all vital
sectors, domestic markets sustained momentum throughout the
day despite weak European cues. The European stocks were
down by one percent in early trade.

"The domestic trigger is strong enough to hold the market
steady against weak European cues. Going ahead, investors
should watch the movement in the US markets for a direction,"
Unicon Financial chief executive Gajendra Nagpal said.

The benchmark Sensex today closed up 294.21 points or
1.77 percent at 16,926.22. During the intra-day trade the
index had scaled up to 17,027, a rise of 395 points.

"A positive development in the US markets today could
catapult our markets further. However, a negative trend
might not bring in much of a fall," Nagpal said.

During the September quarter the manufacturing output
grew by 9.2 percent as consumers increased purchases of cars
and other goods.

"The manufacturing sector growth is likely to increase in
the December quarter. If the farm output increases in the same
tune, then the country can clock a decent growth. Fresh money
can come into the stock markets around February," Gupta added.

Further, agriculture output was up by 0.9 percent during
the quarter, while the services sector grew by 12.7 percent
during the reporting quarter.

For the first half, the economy grew by seven per cent
against 7.8 per cent a year ago, prompting the finance
minister to say that the economy would log in over 7 percent
growth this fiscal.

"The GDP figures reinforces the fact that the stimulus
provided by the government both on the monetary front and the
fiscal stimulus are bearing results. We can expect an
upgradation in the overall GDP growth numbers for FY10,"
Angel Broking VP for research Sarabjit Kour Nangra said.

Echoing similar views Nagpal noted that close to seven
per cent growth in FY10 would be a good figure for the market.

PTI




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