Will the Market Reach 23000 in 2013?

The Sensex is nowhere near the valuations of around 22 times the earnings  it was trading during the year 2010. Since then a lot of uncertainties in the Indian policy scenario and the corruption charges against the government had put a downward pressure on the market. That coupled with the debt crises in Europe had made it worse. But now, global fund managers are looking at India as a viable investment market due to rise in earnings growth. The so called "Policy Paralysis" is disappearing, it was apparent when the government finally gave the go ahead to FDI in retail and deferred the General Anti Avoidance Rules to 2016. The stage for investors both foreign and local is set!

Deutsche Equities sees Sensex at 22,500 by December led by Financial, energy, information technology and industrial stocks. Global biggies like Morgan Stanley, Goldman Sachs, JP Morgan, Nomura, Citigroup and Macquarie have already raised the Sensex target for 2013 to a high of 23,069 by December. They have said that the fresh wave of economic reforms set off by the government last September will revive investment and boost economic growth, which is set for a decadal low of 5.5 per cent in FY'13.

 

In morning trade on January 15, the Sensex climbed to over 20,000 for the first time since January 2011, but settled a tad low for the day. Today the benchmark index rallied 146 points to close at 19,964 points after the government virtually deregulated the diesel prices. Market heavy weight ONGC hit a 52 week high and RIL closed 2.8% higher.

Overseas funds bought USD 24.5 billion worth of shares in 2012, the most among 10 Asian markets. The highest foreign inflow was USD 29 billion in 2010. Deutsche Equities said it is bullish on cyclical stocks, a departure from its last two years of focus on defensives. Consumer staple, health-care and utility stocks would remain 'underweight', the brokerage said.