November 8, 2009

Share Market – Sensex will test 18000 again?

As we already saw the various up and down of the sensex (Indian share market) in last year. It went up to 22000 mark and then disastrous figure of 8000 marks. But the question is will that magic figures of Indian share market (sensex) still can be achieved? And if yes then when or if not then where sensex will move?

I think we will see drop that takes us down 2,500 points, which probably makes the share market reasonable and makes it attractive again, from current levels. There will be continuous small corrections in near future as well which will help the market to consolidate more for better performance.

But I think there is still a fall to come on the overseas side, specifically in the America. Commercial real estate, over a trillion dollars of loans are going to get renegotiated over the next year and that is important because to the extent that capital is constrained in flowing overseas, it may have some impact on India.

Following are the important factors which hint for better share market or stock market results in near future.

1) Inflation continues to pose a threat. Inflation touched at 12% in 2008. Hopefully, fall in oil prices and higher interest rates will reduce inflation without causing too much of a slowdown.

2) Economy growth rate was 9.8% in 2007/08 and is expected to slow down to 7% for next financial market. But this might not be a bad thing as it will avoid inflationary pressures building further.

3) After falling in 2008, the Sensex could offer one of the best returns for global stock markets. India’s strong economic growth will buck the global trend for lower growth.

So I am still bullish on Indian economy, especially for companies having strong fundamentals.It means you can earn still lots of money by investing in Indian share market or stock investment in india.