Samvat 2065 was a bullish — but volatile — period for Dalal Street investors. If the Sensex lost nearly 10,000 points in the previous year (2064), the index has posted a huge gain of 8,813 points, or 103.57 per cent, to end Samvat 2065. On Friday, the last day of the year as per the Hindu calender, the index gained 127 points to end at 17,322.82.

It’s been a cracker of a year with the stock market, illuminating the lives of the investing community — the Sensex which had ended at 8509.56 on October 28, 2008 (the last day of Samvat 2064) recovered sharply due to a host of stimulus measures by the government and $13 billion plus FII investment.

“The market has seen some amazing display of firepower in terms of liquidity. The celebrations ought to continue though the action, in our opinion, will move to stocks beyond the main indices,” said an analyst with India Infoline.

Indian stock markets have delivered handsome returns over the past six months. The BSE Sensex and the S&P CNX Nifty are up by 110 per cent and 101 per cent respectively from their 52-week lows. Net foreign inflows into the Indian capital markets continue to pour in unabated. They have signalled a good appetite for Indian stocks and hence conviction in domestic growth potential.

“Measured on Sensex/ Nifty earnings, markets are trading at 17-18x FY10 estimated earnings, with projected growth of 15-25 per cent in FY’11. Given these broad parameters, though markets are no longer very cheap, they are not exorbitantly priced either. Markets could rise if consensus earnings estimates are upgraded higher to 25 per cent range for FY11,” Mahesh Patil, co-head (equity), Birla Sunlife Mutual Fund.

... contd.