Sensex To Touch 22,000 Mark In 12-Months: Credit Suisse

Switzerland-based bank Credit Suisse said Tuesday that it expects that the Bombay Stock Exchange barometer 30-stock SENSEX touching 22,000 mark in 12 months.

"Industry consensus that businesses should SENSEX earnings (up) from 18 to 19 per cent. Rising costs and interest rates are expected to consider cost effectiveness, and conservative growth expectation of 15 per cent, so it is possible to" Credit Suisse Head of Equity Research in India , when the country Munshi told reporters here.

Munshi said showed 15 per cent growth, with foreign investment in retail and insurance costs, and inflation stabilization would allow the SENSEX touching 22,000 points.

He said that some of the stocks of fast moving consumer goods area was touched by his life highs last week, while others were thrown 40 to 50 percent due to negative news flow.

"Some stocks are highly valued. They are valued at market value 22,000, while some stocks are valued (as), where the market is 16 000," he said.

To illustrate his point, says Munshi stocks like Tata Consultancy Services (TCS), ITC was Housing Development Finance Corporation (HDFC) and Hindustan Unilever rated high because the valuation of Reliance Communication Reliance Infrastructure, Steel Authority of India (SAIL) and DLF were less .

"Unfortunately, the sectors that may well be higher than the weightage on the SENSEX, which has been improved in recent months," She said.

In the telecommunications sector and the interest rate sensitive sectors like banking and the car is attractive to an investor at this stage to add to your portfolio, says Munshi. "In the telecommunications sector has seen signs of improvement after two difficult years," he added.

Munshi said that inflation is still one of the most worrying factor for India's macro policy makers. Inflation was a structural and a little beyond the Reserve Bank of reach, he said. "The RBI should pause after two interest rate increases if growth slows down and we have already seen signs of slowing growth," he said.

Since March 2010 the central bank upped its key interest rates ten times, while the latter is 16 June, when he walked the short-term loans and loan interest rates 25 basis points to 6.5 percent and 7.5 percent.

However, Credit Suisse estimates that 8.5 percent of GDP in the current fiscal year.

"We are at 8.5 percent of GDP in FY 12 and it can be lowered to 8 percent if the monsoon is poor. But 8 percent is still quite robust growth in the economy," said Munshi. Credit Suisse now expects GDP in FY 13, which was 8.7 percent.

In addition, inflation is a problem, was the industrial production is also concerned about slower, he said.

"Sectors such as construction, mining and railways, which are state, is facing delays in decision-making or ordering activity. The performance has been good. The lack of a pick-up in the coming months may be worse infrastructure bottlenecks, which in turn affects the long-term , "one said.

Eurozone crisis in the country can be seen in a foreign institutional investor (FII) payments including Munshi said that it can work in favor of India, as it helps to cool-off in global commodity prices, so in-control inflation.