It seems there is no stopping the Sensex. One of the most widely recognized and watched stock market indicator of India has turned in a spectacular 47% appreciation in 2006 and despite occasional bearish onslaught, this year too, so far, it continues to be a bull's paradise. The 30-scrip index just touched its historic best when it closed above 14,000 for the first time on January 3, 2007; it had been touching this mark in intra-day in the past. However, as the bulls extend their gains into the fourth consecutive year, it raises an obvious question: How long would the party go on?
Concerns about overvaluation, rising inflation and interest rates, and liquidity lend strength to the skepticism that a correction may be around the corner. Wouldn't that be good, as experts say, for an apparently overheated market?
If there is one factor that has lent much strength to the positive sentiment of the market, it is the robust performances of Indian companies consistently over the last few years. Backed by low interest rates, modest inflation and a buoyant economy, growth has been quite encouraging across the sectors. "Corporate India has not disappointed the stock markets by reporting a good set of numbers in the last 14 quarters. A 15th encore would mean that 2006-07 will be the fifth consecutive year of positive and strong earnings growth", commented DNA, a Mumbai-based daily, recently. |
