Stuck@18k, future looks rosy

MUMBAI: Will it or won't it? This is the question on top of the mind of individual investors who have a fascination for sensex spotting. The market bellwether may be hovering in the periphery of the 18,000-mark, but many investors are waiting on the sidelines for the index to cross the magical figure again. This, despite a host of positive news such as impressive corporate performance, robust advance tax collection, strong growth projection for the economy flooding the market.
According to investment advisors, the long-term prospects for the market continue to be bullish and investors should stick to their investment programme, according to their asset allocation plan if they want to maximise their wealth.As for investors who can afford to book profits, experts ask them to redeploy the money in the stock market again in a phased manner.
"Since April, the sensex has been hovering in a tight band of 1,000 points around 17,000. It is yet to breach the 18,000-mark and there seems to be strong resistance every time the market nears it," says D Sundararajan, investment consultant, Trendy Investments, a wealth management firm. "You can't really predict when the market would breach that figure, but the market, as per current valuations, is fairly priced and long-term prospects look good," he adds. "The near-term gains seem to be limited, but the long- term prospects of the market continue to be bullish. The growth momentum continues to be strong," says Navneet Munot, chief investment officer, State Bank of India Mutual Fund.
A flood of good news such as robust advance tax collection, economic growth projection of around 10% among other things are also considered positive for the market in the long term, say experts. "Investors shouldn't get carried away by such news because most of these factors are already factored in the prices. But the IMF growth projection would be a great impetus for institutional investors, especially the foreign ones, to invest in the Indian market," says Sundararajan.
"This could lead to more foreign inflows into the market. If that happens, the market would breach the 18,000-mark. Once that happens, more analysts would start making bullish statements and we would see the retail investors' mania entering the scene again," he adds.
So, what is their advice to investors who are gazing at the sensex for cues? "Don't try to time the market. Stay invested in the market if you want to maximise returns," says Munot. "Continue with your investment programme like systematic investment plan (SIP) if you have one. If you can book profit, do so and park the money in a liquid scheme and reinvest the money in the market through a systematic transfer plan (STP) for a year," says Sundararajan.