The market had soared to records last week triggered by a peace deal in Kashmir between Pakistan and India.

The benchmark 30-share Bombay exchange index gained 6.35 per cent, or 277.07 points, at 4,639.94 for the week after hitting an all-time high of 4,810.33. "The market should consolidate with the index between 4,500 to 4,800 levels," said Saumil Trivedi, chief business engineer at El Dorado Guarantee Ltd.

Analysts said the market's undertone was bullish, helped by strong foreign inflows and signs of an economic revival.

"The market is well poised to rise, subject to periodic corrections," said Vallabh Bhanshali, a director of Enam Financial Consultants Pvt Ltd.

Foreign funds bought a net $172.2 million last week till Thursday. They have invested a net $295.9 million in the July 1-15 period compared to $100.5million in June. "Foreign fund flows, which have been strong, will determine the market's movement," said Rajesh Jain, director at Pranav Securities.

Dollar inflows helped the Indian rupee close slightly firmer at 43.23/24 on Friday. While sentiment in the currency market has been buoyed by the strong foreign fund flows, dealers say they expect the central bank to absorb the dollar sales into its reserves.

Analysts said the interest in the stock market was spread across many sectors.

"There are some who believe the cyclical story is not over, others who feel that index-linked stocks like ITC and Castrol, which have not participated in the rally, will move up this week," Jain said.

But a key factor will be corporate numbers, he said. "We had a mixed bag last week, not all results pointed to the economic recovery story."

Net profits at India's biggest private steel maker, the Tata Iron and Steel Company, fell 8.5 per cent in the first quarter of 1999/2000 (April-March) to Rs 247.9 million on lowerproduct prices from Rs 270.9 million in the year-ago quarter. The country's largest motorcycle manufacturer, Bajaj Auto Ltd, unveiled a net profit of Rs 1.11 billion for the quarter compared to Rs 1.2 billion in the same period a year ago.

Results of software firms were better.

Infosys Technologies, which is tracking gains of its American Depositary Receipts (ADRs) listed on the Nasdaq exchange, is expected to rise after the ADR built on recent gains and climbed another $12 to end Friday at 110-3/4.

On the Bombay exchange, the share ended Friday at Rs 5,110, up Rs 188.95.

Among firms releasing earnings numbers this week are Siemens, Hero Honda Motors, Smithkline Beecham Consumer Healthcare, Ashok Leyland and Castrol.