With the bourses returning to performance mode, expectations are high that the Bombay Stock Exchange benchmark Sensex would regain the 19,000 mark this week.
The 30-stock Sensex gained more than 300 points on Tuesday, and the broader Nifty of the National Stock Exchange gained 92
points on global cues and domestic optimism.
Industry experts say that hopes of end to the ongoing Parliament logjam over foreign direct investment (FDI) in retail could provide the necessary impetus for the indices. The coming days are crucial from more than just the reforms perspective: the fiscal cliff issue in the US, industrial production data and inflation data back home and a decision from the Reserve Bank of India (RBI) on interest rates are in the offing, pointed out Dipen Shah, head, PCG Research, Kotak Securities.
On Tuesday the Sensex jumped by 305 points after Moody's Investor Services reiterated its stable outlook on India's credit rating, and Europe reached a deal on Greece.
BNP Paribas Securities had in a research report on Monday said the market could touch 19,000 within the next six months. Others are a little more optimistic. In a recent study, industry body Assocham said the BSE benchmark index could touch 20,000 in the near future as foreign institutional investors (FIIs) are back in the capital markets.
FIIs have pumped in more than Rs. 100,000 crore in Indian equities so far in 2012 - the highest since 2010 and second highest ever. In 2010, FIIs had injected around Rs. 133,000 crore in Indian equities.
Industry experts say that the FII inflow is also being driven by lower returns from developed markets such as Europe and the US.
If the government fails to move ahead with reforms, or if the impasse in the Parliament is not resolved soon, the Sensex remain stagnant or even shed a few points, analysts caution.
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