Recent reports suggest that Indian stock index (SENSEX) is not likely to renege in near future. Rather it is likely to rise further slowly; not drastically. There several contradictory factors are involved in Indian economy. On one hand the rising inflation, on the other the increasing demand of engineering goods, automotives. The domestic car sells rose to its pick during last festive season. In tandem with the demands for accessories, tyre, steel, air-conditioners and plastic goods are rising. Recently the Reliance Industries found the oil source in Cambey bay, which is their second biggest finding in recent past. This pushed the share price of Reliance last week and that followed by several others pushing the SENSEX around 17000.
At the same time gradually the rate of export is receding because of global, especially US demand slump. This is alarming; oil price in global crude market touched $80 per barrel will result in India’s net forex outflow adding fuel to inflation. This may force to increase the rate of interest in near future. The draught during the first phase of monsoon may hit the agriculture production. Furthermore the government package what was given to tide over recession has to be checked. Obviously this may cause the domestic demand slump.
All these factors will regulate the market according to their respective forces; the favorable ones will push the market to higher level, where as the negative factors will pull down the market. So it is uncertain and difficult to determine which one will rule. So the best is sell that fetches profits for you and buy what still promise further rise and still lying low. Or just wait and watch.