Indian Securities Exchange Hits 15,000

Indian Securities Exchange Hits 15,000

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The Sensex has hit 15,000 in 146 days. Capital goods, oil and other natural resources, metals and bank Indices have grown the most. For the time being, IT, FMCG and auto indices outperform most in this expedition from 12K to 15k. The excitement in the market is obvious. For Ramesh Damani, Member at K Pact, it's an astounding process for the markets and said everyone should feel fortunate to be a part of this extraordinary Indian market run.

On whether, the markets this time took too much time to hit the thrilling figure, he said, "The Dow took 18 years before it crossed the round figure of 1,000. So six months to reach this level is fine. It is believed the Sensex needed some consolidation and the suitable price valuation had to be discovered. Having done that, the markets still have broken out and with good breadth, which suggest the promise of maybe even a higher index. Never forget, records are meant to be broken and the markets are doing just that. This market has underperformed for some time and it was just a matter of time.

Technically and pyschologically it's an important hurdle and we should expect some consolidation. Nevertheless there is no sign of a ceiling yet and the uptrend is likely to continue. Interestingly, the markets have been rallying in terms of a sectoral leap frog simply because one outperforming sector after finishing its run, passes the buck to another sector, which is helping the index to sustain during every correction. A great deal of underperforming sectors have started to play along, like auto, cement, sugar and FMCGs and the Index heavyweight, technology is expected to join in, going forward.

Parnum Tao, Head-Institutional Sales at Putney Investments feels even though 15K, is a happy milestone for the period, in PE terms, it means that markets are trading at close to 17 times its forward earnings. 'What it means now is that for the market to breakout of this range, a huge flow of liquidity is needed.'

Most agree on this point as the quick influx of capital could be coming, not to an end, but a certain slow down. We've seen it time and time again, in the U.S. markets, Great Britain, Japan and greater Asia. It would make sense for a correction to occur at some point. How big that correction is always the problem. Additionally, is the rising real estate market at tied to this process and if a sudden crash occured, would it spell disaster? Time will tell.

About the Author:
B. Charles Smith is a 20 year technology industry veteran specializing in international business and systems integration. He is the chief editor of http://mynaukri.net, one of India"'s most comprehensive resources on market trends and India jobs. Additionally, he has interests in many broad entertainment site including http://slubber.com (video aggregator) and http://mybuzzcut.com (leading Myspace codes site).



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