Sensex 9000 - Comments

We continue to be positive on the markets. Our advice to retail investors is to look at the markets from a longer term perspective of at least 2-5 years and not time the markets.

Investors will do well to remember that 9,000 is just a figure. But if we look at the valuations we are still some way from peak levels. On FY07 estimates, the Sensex trades at 14x, which is fairly attractive.

Though corporate earnings growth has slowed down it should still be above 15 per cent going forward. Markets should reflect that growth and should be able to give a return in the range of 12-15 per cent. Anything above that will be a bonus.

"" Tridib Pathak, Chief investment officer, Cholamandalam Mutual Fund

More steam in the long run

The rally has been triggered by more money coming in. Foreign institutional investors have been aggressively buying into the markets and, thus, there have been fresh inflows.

Moreover, the diversity of stocks in India and the quality of management, also leads to greater inflows. It is difficult to give an outlook for the short term, as such movements are led primarily by fund flows.

But in the long term, we see the economy doing reasonably well. The forecasts for 2007 are strong. We are bullish on capital goods, cement, construction, software and banking.

"" Rajat Jain, CIO, Principal Mutual Fund

Reversal in FII inflows will trigger downfall

Basically, money is flowing into the markets, which has been the key driver. The markets are still looking good and can rise further. Our outlook is positive on most sectors.

This is, however, a stock-specific market. Valuations are looking a bit stretched. One can expect a correction after such a rally, but its difficult to predict when it can happen. I think liquidity will be the key to the future direction of the markets. Any reversal in FII inflows could lead to declines.

"""" N Sethuram Iyer, Chief investment officer, SBI Mutual Fund

Expect short-term volatility

We continue to be bullish on equities on a longer-term (more than one-year) perspective. Even though earnings growth is slowing down, it is still attractive and we expect it to be around 18 per cent going forward, Keeping that in mind, equity markets should be able to give a return of 15 per cent in the next year.

Markets could witness volatility in the short-term. Though we follow a bottom-up approach to stock selection, we find companies in the mid- and small-cap segment attractive, because of their scalability and potential for growth.

"" Anup Maheshwari, Senior VP- head of equities, DSP Merrill Lynch Mutual Fund

Long-term India story is intact

Today's rally was more of a continuation of the bullish trend existing globally. India, along with other emerging indices have reached their all-time highs, while Russia and Brazil are close to achieving their new highs.

Global concerns over prolonged state of interest rate tightening are fading and indications by the Fed have boosted sentiments. Allowing FDI in various sectors to achieve 8 per cent GDP growth have all made India as a favourite financial destination for FIIs. While in the short term, the market is expected to be volatile, the long term (3-5 years) growth story of India is intact.

"" Mihir Vora, Head of Equities, ABN Amro Asset management