It's
`cruise control' for bulls in the Indian stock market. For,
nothing else can explain a rise of 1,000 points in just 16
trading sessions and a meteoric rise of 5,000 points in less
than a year! The phenomenal rise of Sensex, from the level
of 7,000 touched in June, last year, to reach first, 11,000
in 29 trading sessions by March 2006, and then snapping a
gain of another 1000 points in just 16 trading sessions to
zoom past the 12,000-mark, tells it all - It's bulls all the
way.
However,
as the Sensex continues to defy the law of gravity, the specter
of a correction in the offing also looms large as concerns
about overstretching valuations rise. What is driving the
market, in general, and the Sensex, in particular? The market
buoyancy surely stems from strong economic fundamentals and
corporate performances. However, overstretching valuations
are a cause for concern. And the fact that the market is driven,
above and everything, on the strength of strong liquidity
adds to the growing skepticism. Amidst concerns, the question
that pops up is, "how long will the party last?"
In
2003, when the share prices began to move up after a long
lull, though many observers believed this rise to sustain
as it was a broad-based rally accompanied by wide-scale reforms
in the stock market, even the most optimistic of s
would not have thought that the country's widely-watched benchmark
index would, three years down the line, be at this level and
still be going strong. However, as the bulls took charge,
the market, in general, has not looked back. |
