MUMBAI (Commodity Online): The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has projected indices of BSE and NSE would respectively touch 20,000 and 6,000 mark by January 2010 due to continuously rising business confidence of investors and FIIs in Indian economy and more than expected financial performance of India Inc in Q2 of current fiscal which is likely to go on in near future too.
In its analysis of stocks by early 2010, the ASSOCHAM states that it does not subscribe to a view that Indian stocks are overstretched and need correction since all most all financial parameters and indicators show continued growth and competitiveness in almost all major sectors of economy and thus optimism should continue to prevail to push up significantly stocks further.
This is because of the reason that India is the 2nd fastest growing economy after China and will go on to receive the global attention resulting in further FIIs inflows as also sustained concentration from retail and other investors, said ASSOCHAM spokesman.
Releasing the ASSOCHAM assessment, the ASSOCHAM spokesman said the Chamber also feels that IIP numbers, inflation, credit growth, interest rates, and tax scenario etc. will continue to drive growth prospects and favourably influence capital market substantially in months to come, especially from November onwards.
Still another reason for optimism for stock markets reaching the projected levels is due to the fact that budget euphoria start building up from January onwards with expectations from all quarters for incentives, reduction and moderation in tax slab including increase on personal income tax slabs. Since government’s one point agenda is to ensure and sustained continued and healthy growth with inflation at managerial limits, there is no reason as to why stock markets, which reflect expectations and aspiration of industry will not move towards further buoyancy.
Thirdly, since efforts and policy directions of UPA government support growth of capital market by building a consensus on issue of disinvestment, the ASSOCHAM expects government will begin to offload its equity gradually in profit making public sector undertaking for higher price to partly contain fiscal deficit and support its infrastructure project.
Other factors that will positively move stock markets will be through participation of rural folk into it because its income has started going up and driving growth in telecom and FMCG sector and more recently two wheeler segments has joined these two sectors.
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In addition, BPO call centres and IT inclusiveness is also getting intensified in interiors including tire 3 and 4 cities for establishing linkages of rural folks into stocks. Large number of cooperatives on lines on Amul are getting established in a state like Rajasthan and Andhra to drive growth with micro finance facilities getting pervasive through self help group for economic activities. All these are positive indicators to drive growth reflection of which will come through buoyant stock markets.
Lastly, road projects are spreading and establishing linkages between rural and urban market for better business prospects and these linkages will work positive factors for inclusive growth to enable Indian economy move on higher growth trajectory, added the ASSOCHAM spokesman.
The GDP growth expectations to touch 7% are reaffirmed and there are strong undercurrents building in the economy with India Inc getting ready for good financial performance.
