Are bull markets really going to stay?
By Sudarshan Kumar   |   Wednesday, 20 May 2009, 00:24 IST   |    9 Comments
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Are bull markets really going to stay?
Bangalore: Sensex has taken an inconceivable jump of 17 percent and rupee has strengthened against the dollar by 3.1 percent in a day span. Till Monday, Sensex had gained 26 percent in 2009, but the bull blitz leading to an over 2,000-point gain pushed Indian markets well ahead of their global counterparts on the same day. This magnificent bull-run has triggered discussions among officials at broking outfits and fund raisers as to whether the market will hit 20,000 mark by the end of 2009. Meanwhile, companies are not sure as to how long this market rally will continue. R.Suresh, Regional Manager, Sriram Life Insurance says, "Market is still in gloomy mood and investors are afraid to invest as the market situation is just like bubbles in water." He expects the market to trade in 16000-18000 brackets by the end of 2009. According to Adesh Gupta, CFO, Grasim Industries, the current market trend is certainly positive. But government actions in the next two-three months will have to be watched closely to say something on the continuity in the trend. "The rally of market will also depend on the selection of the minister for finance and foreign portfolio by new government as foreign policy is one of the important medium to keep the economy growth at high level," says R.Suresh. "Foreign investors are now taking a more serious view on the Indian market. One reason for this is the fact that political uncertainties are over for the next five years," said N Sethuraman Iyer, CIO, Shinsei Asset Management. Most of the officials see downturn in trading in about 8-10 sessions. Market can shed around 1,500 points over the next two months, before market rally gathers some stability towards mid-September. An anonymous source from Bajaj Capital says, "It would be very difficult for market to touch the limit of 20,000 by December 2009 as most of the investors do not want to take risk at this time." The pre and post budget phase will be crucial for Indian markets. There could be some consolidation before the market moves on, feels an analyst at Credit Suisse who believes that Indian stock market could cover shoot considerably from pre-budget period till July. "We expect the government to take some tough decisions. The government, in its bid to reduce fiscal deficit, may even resort to raising personal and corporate taxes," said Bonanza Portfolio Fund Manager Anmol Sekhri. Sekhri feels the Sensex would trade in the range of 14500 points on December 31, 2009.

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