Few events capture the resilience of an economy as dramatically as trends in the country's equity markets.
Backed by a 25% rise in key indices in the last 12 months, India's markets are eyeing a fairytale all-time high for the Sensex in 2013 powered by a flurry of government-initiated reformist moves and a flood of investment from overseas funds who are seeking out global islands that fetch healthy returns.
Global investment banking major Morgan Stanley has projected that there is a 60% probability of Sensex breaching 23,000 by December 2013.
"Conditions for a new bull market are getting slowly satisfied. The yield curve has stopped flattening, liquidity is improving, valuations appear supportive and profit margin expansion is a growing possibility in the coming months," Morgon Stanley said in a report recently.
HSBC and Deutsche too came out with similar bullish forecasts.
"Corporate earnings growth could improve to around 15% next year and thereafter to around 18- 20%, once private sector investment spending picks up momentum in 2014-15 and 2015-16, as we anticipate," said S Naganath, president, DSP BlackRock.
Sensex, which on Thursday lost 102.83 points or 0.51% on profit booking to close at 19,923.78 points, is fast closing in on the all-time intra-day high of 21,206.77 points it had scaled on January 10, 2008.
The Sensex had hit an earlier all-time closing high of 21005 on November 5, 2010, which was then powered by a cracker of a debut by public sector Coal India Ltd on listing after the country's largest initial public offer.
Two years hence Indian stocks are again set to first reclaim and then canter past the peak it had run up a couple of years ago.