• PAGE ONE
• INDEX
• HOME

Study paints rosy picture for Sensex

Our Bureau

MUMBAI, Dec. 4

Post-September 11, there seems to be optimism among the retail investors about the Indian stock market. According to a study, about 80 per cent of the retail investors expect the BSE Sensex to be somewhere between 3,500 and 4,875 levels by end of 2001 an d only 10 per cent expect the Sensex to be lower than the 3,500. While the average expected closing Sensex level is found to be 4,100 by year-end. Today the BSE Sensex closed at 3,320.

The study was done by the Delhi-based Society for Capital Market Research and Development among 550 households in around 40 cities across the country.

The terrorist attack of September 11 in the US and the subsequent war in Afghanistan and its economic aftermath have depressed the sentiments somewhat after the poll was conducted but that may be only temporary phase, it said. Once the Afghanistan war is over, the recovery is likely to be quick. The US stock market has already become bullish.

Watch out for average P/E ratios, which will have a more determining influence, the study added.

After the terrorist attack in the US, the India stock market had fallen and the fear of slow-down in the global and Indian economy has adversely affected the market sentiment. Following the attack, the BSE Sensex had touched an eight-year low level of 2, 640 in September 2001.

However, the results indicate high-level of uncertainty as reflected by the wide range of expectations. The most optimistic expectation was Sensex closing at 6,500 by year-end and the most pessimistic expectation was as low as 2,300.

Similarly the inter-quartile range (that is the range between upper and lower quartiles) is 4,458-3,800, that is, 50 per cent of the respondents expected the Sensex to end somewhere between 3,800 and 4,458. This means that one-fourth of the respondents e xpected the Sensex to close higher than 4,458 and another one-fourth expected to close below 3,800.