Experts Bullish on the markets...

Forecast a further 30 to 40% appreciation in 2010

2009 ended on a high. And most felt that, after an over 70 percent plus appreciation in just around ten months, the markets would take a breather or perhaps even correct by 10 to 15 percent. But NO… that may not happen if the experts are to be believed. In fact all the market gurus that were interviewed echoed one voice… all’s well with the economy and the Bull Run could continue through 2010. The forecast is: expect a further 30 to 40 percent appreciation in stock values.

Nirmal Jain, Chairman & MD of India Infoline Ltd: The Domestic consumption story would be true in the next year as well. Sectors like Auto with stocks like Mahindra & Mahindra and Bajaj Auto would do well. Even sectors like FMCG and Pharma would be doing well. It would be advisable to invest in large cap and Large Mid cap stocks. Small Cap stocks should be avoided.

Paresh Bhagat, Chairman, Mangal Keshav Securities Ltd. I am bullish and expect the sensex to touch the 20,000 level in 2010. I feel selective stocks in the metals, banking and IT sector would do well. Amongst stocks, I would recommend Sesa Goa, Suzlon, ICICI, IDBI, TCS and Oracle (OFSS). I expect an average 30 to 40 percent appreciation in these stocks in 2010.

Dr. Anil Lamba, Investment Guru and Author of “Figure Out the World of Figures” I continue to remain strongly bullish on the markets. 2009 was good and I am sure 2010 will be substantially rewarding. My guesstimate is that a further 35 – 45 percent appreciation is on the cards. Apart from steel and cement, I am also bullish on the Education sector. Educomp and Core Projects look good to me. In steel I like Tisco and in cement I would stick with ACC.

Motilal Oswal, Chairman & Managing Director, Motilal Oswal Securities: I feel that the bullishness would continue in the market till 2015. There is good opportunity as the income levels and the purchasing power of the people are increasing. In the year 1985, 92 percent of Indians were living below the poverty line. The figure has come down to 54 percent now. By the year 2025, the figure would come down further to 22 percent. Also India has great saving levels. It stands at 38 percent, which is the highest in the world. With the country’s GDP stated at $1.2 trillion, this means that it has around Rs 20 lakh crores worth of savings. Most of these savings end up with the bank deposits which just offer a 6 to 7 percent interest rate, the other options being investment in equity and mutual funds.

Navneet Munot, Chief Investment officer of SBI Mutual fund: There is an acute shortage of Infrastructure in the country. For the next 25 years there would be huge demand for infrastructure related stocks in the country. Other sectors like Food & Beverage, Media and financial services look promising.

Ajit Dayal, Chairman & President of Quantum Mutual Fund. Investors must stop seeing stock markets as a one-year time horizon event. They should leave that sort of short-term view to gamblers, speculators, and the business TV channels that thrive off the activity of these speculators. What a stock market does in any calendar year is a statistical event. Investors should buy stocks for decades and worry about what stock markets will do when they need the money as they get older: at the time of the exit. We strongly believe that the Indian economy will continue to grow at over 6% per year for the next decade and this growth will generate a decent return for long term, sensible investors.

With regards to sectors where we would put money, in the Quantum Long Term Equity Fund, we do not invest in “hot sectors”. We prefer buying into companies run by sensible managements and founders who can best position their businesses to take advantage of the growth in India’s GDP.

Dhirendra Kumar, CEO of Value Research During 2009, the main indices were up 70 per cent. If 2010 were to be better than 2009 then that would mean that in December 2010 the Sensex would be to more than 29,000 and the Nifty more than 8,500. I'm pretty sure that that's not going to happen. However, if the signs of strong growth that we have seen recently, hold out, then it would still be a reasonably positive year, although with considerable volatility. Certainly, there's every reason for investors to continue to keep a good part of their long-term money in stocks.

As always, equity investors should consider large-caps to be their core holding as they'll definitely fall less when the markets goes through its swings. Unlike large-caps, the general direction of the mid- and small-cap stocks universe has no real bearing on any individual company in this space. Selectivity will matter for investors and while one can expect many winners, the investing environment is such that there will be more than a few hot stories that will blow up. Real estate as a investment is a racket and should be unambiguously treated as one by investors.

Anil Mascrenhas, Editor at Indiainfoline.com I am quite bullish as far as the Indian Stock markets are concerned. We expect the markets to cross the 21,000 levels. There is a bounce back in the economy and we have an 8 percent growth rate again. We expect the trend to continue in 2010 as well. Money supply has improved. The bottom lines of the Indian companies are certainly improving. All these triggers would certainly push the Sensex above the 21K levels.

I recommend sectors like Engineering and power for long term investment, but am a bit cautious on the Banking sector. A lot would depend on the Reserve Bank’s decision to hike its Cash Reserve Ratio (CRR). This would impact the banking stocks as well

Anand Rathi, Founder and Chairman of Anand Rathi Financial Services: When the economy is good, it does reflect on the stock markets as well. The finance minister has also predicted a 7 to 8 percent growth. The Indian economy will continue to remain good in the coming year as well, as far as the corporate earnings are concerned. A 20 to 30 percent appreciation on the markets is possible.

Anup Bagchi, Executive Director, ICICI Securities Ltd. The decade saw three earth shattering events which had a big bearing on the financial markets – the dot com bust, 9/11 and the financial crisis which was triggered by the Lehman brother collapse.

Yet, during this period, the stock market indices have grown in excess of 3.5 times. Despite a global slowdown, even SIPs started in July 2008 have given a return of 12% till date. This certainly reiterates the fact that one has to take a long term view while investing in the markets. Our message remains the same - 'Keep investing and stay invested for your life goals'. In an economy which is expected to grow rapidly, more investments must shift to equities directly through stocks or indirectly through mutual funds and investment products.

Recommended Stocks for 2010

Tisco ACC Mahindra & Mahindra Bajaj Auto Sesa Goa Suzlon ICICI IDBI TCS Oracle (OFSS) Educomp Core Projects