Market's stunning rally: Is this just earnings euphoria?

After opening in the red, the market on Monday climbed steadily through the session to end with over 2% gains. Shrugging off weak global cues, the Nifty surged 125 points to close at 5,911 while the Sensex took a leap of 434 points to end the day at 19,696. So does this mean that there is more steam left in the market or is it just excitement ahead of the earnings season?

The rally according to S Naren CIO of equity at ICICI Prudential was lead by the huge flow of money which was pumped out by the Reserve Bank of Japan after the nation was hit by the earthquake there. "That seems to have resulted in a big rally in gold, silver and most stocks all over the world," he said. Moreover, he feels the government and India Inc don't offer a sign of big worry at the moment. "But if petrol and diesel prices are not subsidized then fundamentals could be affected," he added. Oil prices, inflation and scams all have been factored in, said independent market strategist Rajesh Jain. "Investors have by now reconciled to all these and thus global investment in once again seeking emerging markets and India would easily be amongst the top three out there. So the association that India would be an underperforming market in the initial couple of months of this year is firmly being erased," he said. "I think there has been an element of short covering today but this market is looking to buying with a positive expectation and if the result seasons indicate a safe FY12 there is no reason why we should not get past the 6,000 mark," Jain added.