Sensex & Nifty: Targets, Statistics and such
With the Sensex jumping over 16000 without much effort, loftier targets are being bandied about: UBS says Sensex to hit 19,000 by 2008
Foreign brokerage, UBS, in its latest India strategy report, has raised its Sensex target . . . next year (2008), the Sensex will breach the 19,000-mark. Earlier, UBS had expressed its view that 2007 will end with the Sensex at 15,000. UBS cites reasons like ‘strong capex cycle and secular growth in consumption due to sustainable rising income levels’ as the main domestic drivers.
I wrote a post back in March where Dawnay Day AV Financial Services had mentioned 20000 as a likely target by late 2008. Do I hear 21000?
Not all stocks have seen good times though: Sensex fails to cheer BSE 500
Despite the 30-share sensitive index, Sensex, gaining 2,575 points since August 21, 58 stocks of the broadbased BSE 500 ended in the negative. Information technology stocks led the fall, 15 of which ended in the negative during the period from August 21 to September 21. Pharma sector followed infotech with eight sector stocks dwindling.
But it is a minor wrinkle in an otherwise spectacular move (remember that the Sensex dropped to 14000 in mid-August).
Sensex at 19k would imply the Nifty-50 index at 5500 or so. As for valuations, the trailing P/E ratio for the Nifty stood at 21.9 as of Friday. A 20% EPS growth rate would put the forward P/E at ~18.
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