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Can the BSE Sensex Sustainable Break 20,000 Mark ?

February 27, 2013

bse-sensexThe BSE Sensex has brokwn the 20,000 mark in Late 2007 / Early 2008 and also in Nov 2010. It flirted with the 20K mark in 2013 but has failed to sustain above it.

Credit Suisse discusses Five Favorable and Important Factors that can lead the Sensex to sustain above the 20,000 mark

  1. The Price / Book currently at 2.16x compares favorably with 4.9x at 2007 highs and 2.9x at
    2010 highs.
  2. Indian Market premium relative in to other emerging market has dropped considerably from 49% and 32% at the 2007 and 2010 highs to just 8%
  3. 2013 EPS is above 2007 levels. And 2013E consensus EPS revisions are flat.
  4. Inflation is slowing with the 3-month moving average for the WPI running at 1.7%
  5. Indian Budget is likely to be prudent – some fiscal tightening and spending restraint

Finally, Credit Suisse lists many risks such as corruption scandals and scams, election uncertainty, disappointing Budget and the current account deficit. What say ?

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