The boom in India

No hangover here! The markets have continued their upward trend after the Xmas break. Nifty closed at an all-time high(way ahead of its tech-boom peaks) & Sensex crossed the 5,700 mark.

JII NAV is a bit dated now – the markets have moved some 2-3% since the last valuation; The share price has a bit of catching up to do.

Analysts are very bullish about this market :

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The bulls are here to stay, say analysts. And the Sensex could see levels as high as 10,000 points in two years' time.

The India story is booming, bulls have taken over the stock market, and it seems that the Sensex is well set to conquer the previous all-time high of 6,150 points very soon. In fact, according to market analyst Saumil Trivedi, the index could even cross the 10,000 mark by the end of 2005.

He told CNBC-TV18, "By the end of 2005 I am looking at 10,000 plus on the index. Maybe even earlier. Levels will keep on coming and evolving." He added that this is a long-term bull run, and it would make sense to stay invested.

Sajiv Dhawan of J V Capital Services feels that the way the market is moving, the index could go to any levels now. He too, is of the opinion that one should stay invested right now. "Compared to China our valuations are still cheap. A Sensex level of 6,000-6,500 is possible in the next couple of months. There is nothing to upset the cart. The only thing could be the results. One should not short sell. It makes no sense to be short on the market to be right now," he said.
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Commenting on today's trade, technical analyst Dhiraj Mohindar pointed out that it was crucial that the Nifty managed to close above the 1,818 level. He expects the next resistance at 1,860 points, beyond which there could be a sharp upmove to 2,085 points.

However, there is a disparity between the Sensex and the Nifty. Mohindar feels that there is more clarity in the Nifty. He expects the Sensex to face significant resistance at 5,830 levels and take support at the 5,480 mark.

Contrary to many voices in the market, who have been calling the current sharp run-up the effect of irrational exuberance, Trivedi feels that there is no reason to exit this market right now. He pointed out, "If you have some profit in mind and achieve it, and want to get out, that is fair enough. But then you will miss the larger picture. Such bull markets are known to give tremendous returns."

Dhawan said that a lot of people were expecting a correction, and the rise in the market was a bit surprising. However, he said that the bullish undertone, along with a very healthy cost of carry indicates further strength. He doesn't see retail investors panicking even if the market corrects for the next few days. According to him, "It will take at least a 4-5% fall for people to get worried."

Trivedi feels that the reasons of irrational exuberance then are nowhere in sight. "What is happening is that the market is coming out from the previous crash and people are still not being able to forget that experience. My contention is that what we are comparing is grapes of different qualities. This is a long term bull market. There will be the inevitable corrections. But as far as investors are concerned, they need to take a primary view in this market not on sectors and stocks, but on India. India as a story has arrived," he explained.
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