Dow, DAX, CAC, Nikkei on fire
The Dow has hit a lifetime high this week, with 2 per cent gains. The Japanese Nikkei, the French CAC and the German DAX have hit 5-year highs and just a shade lower than their lifetime peaks. Ditto for other markets like the Australian markets.
How far can the Sensex go?
If anybody tries to predict this one, he's trying to play too smart. Not one analyst predicted that the markets would fall 5-6 per cent before the budget. And, no analyst can predict where the Sensex could go. Predicting that one is like putting your foot in the mouth. As long as foreign funds continue to pump money, there's no telling where the markets could go. They again net bought in excess of Rs 1200 crores on Friday, something that they have been doing virtually everyday.
You may have talks of a high current account deficit, worrying fiscal deficit and high inflation. That does not bother anybody, as long as there is global liquidity.
The ECB, the US Federal Reserve and the Japanese Central Bank have pumped so much money by way of easing, that money is ultimately find its way into stocks. It's a different matter that they printed so much money to push growth in their respective economies. We wish that money was used to help growth rather then set stock markets around the globe on fire.
So, never mind talks of weak economic fundamentals, as long as the monetary easing stays in place, stock markets around the globe, including India would be on fire. Where the Sensex would go, is hazardous to predict.