With quarterly results indicating a good performance, Indian corporates are likely to fare well, taking advantage of the economic turnaround, according a review by Templeton Asset Management (India) Pvt Ltd.

"Given that selling by domestic funds has petered out, we could see a pre-budget rally building in the coming weeks" says the review.

Global fund managers continue to be overweight on India among emerging markets. This combined with the restructuring plan announced for UTI should provide impetus to the markets, since there are strong indications that mid-year selling by UTI might not happen, says the preview.

"However, the fly in the ointment could be a prolonged war in the Middle East which could push oil prices higher", says the study, adding that while the short term ride is expected to be bumpy, the long term story is attractive.

Domestic market witnessed some sector rotation last month as investors who were overweight in technology sector moved into old economy stocks, given their good results and future growth potential, the review says.

Economic indicators continued to be strong and there are growing indications that the impact of the delayed monsoon will be minimal, the review says.

Last month also saw Indian markets get the vote of confidence of global fund managers as foreign institutional investment inflows were strong and for the month alone the inflows were $184.5 million, adds the review.

Refering to the automobile sector, the review says that results from the auto majors continue to be good, with low interest rates keeping the demand up says the review adding that however increasing competition and high base effect could result in a non-repeat of this performance.

On the infotech sector, the review says that the quarterly results were in tune with the expectations of analysts, adding that given the insignificant growth in global spending, the performance of the top rung companies is commendable. "It is the weakening of dollar that seems to be impacting margins" adds the review.