The indices failed to capitalize on early momentum and slipped sharply to close the day in the red. Metals, autos and capital goods were the worst hit while tech stocks outperformed the indices.Nifty closed at 4,496 down 15 points, while Sensex shut shop at 15,290 down 21 points.

Speaking on the markets Dipan Mehta, Member of BSE/NSE thinks that this market is now entering into a high risk, high return zone where a lot of liquidity is chasing stocks.Global indices also are doing exceedingly well and equities across the globe is in a bull phase. That seems to be helping the sentiment over here and a lot of investors waiting in the sidelines, taking cue from there and trying to deploy as much as they can into stock markets.

Speaking on earnings Manishi Raychaudhuri, Executive Director of UBS Securities says that as far as this quarter is concerned, we have a consolidated earnings forecast for the entire stock universe that we cover, of close to 18-19% YoY growth and similar topline growth.

"We believe, there are certain sectors likely to outperform, particularly telecommunications, cement, engineering, capital goods and construction. Cement may see superlative growth in the range of 30-40%, maybe 40-50% for engineering companies and 70-80% for telecom stocks"

He feels that other sectors likely to drag down the average could be automobiles, where some stocks could actually report negative earnings growth. "Even oil and gas and possibly IT service companies could be somewhere in between. That is as far as our quarterly earnings forecast is concerned"

Experts feel that for FY08, our earnings growth forecast has gone up significantly over the last 4-5 months. Earlier, they were talking about 18-20% range, but now our latest estimates indicate they are forecasting about 23% earnings growth in FY08, something in the range of around 17-18% in FY09. So, when we started off this year, in Jan 2007, the Sensex EPS forecast was Rs 821 and now it has gone up to Rs 860, that is an significant increase of about 4-5%.

"On the whole, we remain bullish on the market. We have a target of 15,000, which the market has already breached, but we must also keep in mind that 15,000 was arrived at the beginning of this year, when we were factoring-in the old forecast" adds Manishi.

Nitin Raheja, CIO of Dawnay Day thinks that earnings seem to be moving pretty much in line with what was expected. "The market has broken that technical range, I won’t be surprised if we are anywhere between this range of 15,000 odd. The point is that the liquidity flows have been so buoyant and so robust and that’s singularly driving the market more than anything else" he adds.