The Hindu Business Line : Sensex will continue to trade high, says FICCI survey

New Delhi, Dec. 9The bullish trend of the Sensex, which has scaled new heights in the last two years, is expected to continue and top the 25,000 mark in the next two years, a survey conducted by the Federation of Indian Chambers of Commerce and Industry (Ficci) has said.

The survey, titled ‘Indian Capital Markets — Ahead of Curve’, has captured the sentiment of the market and the market stakeholders. The respondents were mainly brokers, CFOs, finance managers, investment bankers, mutual funds, portfolio managers, asset management companies, and private equity players.

“The market fluctuations of late, due to various factors like the rupee appreciation, Participatory Notes (PN) turmoil, Fed rate cuts, increasing crude oil prices, and sub-prime crises, do not seem to have dampened the sentiment. Around 58 per cent of the respondents believe that the market in one year will achieve 20,000-23,000 levels and another 23 per cent feel that it would move beyond 23,000.

Fifty five per cent of the respondents predict the market level to reach 25,000 and above at the end of two years and about 26 per cent feel that Sensex would remain between 23,000 and 25,000, the survey pointed out.

Sector outlook

On the sector-wise stars of the markets, the respondents have identified banking and engineering sectors as well-performing sectors. On the other hand, IT, pharma and auto are the few sectors that are likely to underperform, they felt.

On market valuations, the Ficci survey revealed that the market opinion is divided though marginally in favour of fair valuation as evident from the results. “Fifty three per cent of the survey respondents described the Indian markets to be fairly valued, while 47 per cent believe it to be overvalued,” it added.

The respondents also said that the market is still shallow and adequate measures should be taken to widen it as otherwise markets will remain exposed to some level of volatility.

On PNs

“Ninety one per cent of the respondents believe that the proposed regulation on PNs was justified and ninety per cent of them were satisfied on the final guideline of the PNs. While 55 per cent of them believe that capping on PNs would not affect the inflows, 45 per cent have said otherwise,” the survey pointed out.

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