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Indian shares seen strong, techs to charge up

BOMBAY: Indian shares are likely to open higher and remain firm this week led by the high-flying infotech sector and select old economy stocks, after wild swings last week.

A revamp in the benchmark Bombay exchange index, making it more representative of the new economy, and robust earnings numbers expected from infotech firms will drive prices, dealers said.

They said markets have regained stability and confidence after a stunning 7.24 percent rise on Friday calmed nerves battered badly on Tuesday when it plunged 7.19 percent with its second largest point drop of 363.12 points in history.

Markets will also be cheered by the 4.19 percent jump on the U.S. tech-laden Nasdaq market on Friday as money shifted into technology heavyweights just days after a wrenching correction.

But Ramesh Damani, a member of the Bombay Stock Exchange (BSE) noted that investors are cautious over software stocks after last week's slump.

"Tech shares will definitely do well but we are recommending a mix of old and new economy stocks," he said.

The benchmark Bombay Stock Exchange index will open on Monday looking more representative of the market. A chunk of old economy stocks from the hospitality, power, chemicals and finance sectors are eased out to make way for four new entrants.

The four are Pharmaceutical firm Dr Reddy's Laboratories, media and television firm Zee Telefilms, software firm Satyam Computer Services and Reliance Petroleum.

Together, the weightage of the new economy sector in the index will increase to around 40 percent from around 32 percent.

Infotech firms will kick-off the corporate earnings parade this week and analysts are expecting bullish outlook for the sector and bargain picking by funds.

Infosys Technologies, Satyam Computer Services and NIIT Ltd announce their results next week, and analysts expect bumper profit.

A Reuters poll of 15 brokerages on March 30 showed Infosys net are expected to surge nearly 106 percent to 278.8 million rupees ($6.4 million). Satyam's net profit is seen jumping 84.62 percent to 134.4 million rupees and NIIT Ltd, which declares its second quarter results on April 14, is likely to show 64 percent bottomline growth to an average 234.6 million rupees.-Reuters