'Sensex may cross 22K in medium-term'

The BSE benchmark Sensex may breach 22,000 level in the medium-term as low inflation is likely to pave way for the RBI to cut rates to fuel growth, say experts.

"Being greedy when others are fearful, the Warren Buffet way, is what that can drive Sensex to psychological 21,000 mark in the near-term as economic fundamentals still remain weak.  

"Budget 2013 has already passed like a non-event for markets, despite some really big positives in it," said Vikas Jain, founder, Aditya Trading Solutions.

"Domestically, companies are sitting on huge cash pile, low inflation is paving way for RBI to cut rates, gross domestic product seems to be bottoming out, enough reasons to say that peak 22,000 could be reality in medium-term," he said.

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The BSE benchmark Sensex is 1,940.67 points away from its record high of 21,206.77 set in January 10, 2008.

The Sensex on Tuesday climbed 265.21 points to close at 19,143.17, recording its biggest single day gain since November 29, 2012, when it had soared by nearly 329 points.

Markets can rally further on rate cut expectations from RBI in forthcoming credit policy this month, an expert said.

According to Ashika Stock Brokers, Research Head, Paras Bothra: "Before surging to record high levels, markets may see consolidation and some major positive trigger is needed to push the market to such higher levels. These are the pre-requisite for crossing the all-time high level.

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"When it will happen is only a matter of time as one cannot time the market. If the US markets are heading higher, Indian markets could also do that as foreign investors appetite for Indian equities remains quite high," Bothra said.

This week Dow Jones made a smart comeback hitting all-time high, driving up Asian markets.

Indicative of the new confidence in the corporate sector and the economic recovery, the Dow Jones Industrial Average has climbed over 125 points to close at record high of 14,253.77.

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The rally saw Dow Jones topping the previous record set in October 2007 and helped investors overcome the losses tied to the financial crisis in 2008-2009.

Market experts said that if GDP trends remain good, corporate earnings are healthy and interest rates comes down, then we can see Indian markets hitting all-time high.

"The Indian economy is still facing challenges and also the corporate performance has been sluggish," CNI Research CMD Kishor Ostwal said.

Finance Minister P Chidambaram has assured India Inc that a clutch of decisions, mainly on indirect taxes, would be announced during the course of debate on budget and Finance Bill in Parliament.