Is there a further fall around the corner? Some believe the worst is over and the market is in for an upward swing.Says Agarwal: "We are closer to the bottom than the top. After five years of mandi (slump), we are seeing some kind of a revival. First quarter earnings have been encouraging and the market should pick up soon." He expects the Sensex to go up 15-20 per cent by March 2003. Ashish Jagnani, research analyst with Mumbai's Batliwala and Karnani, feels that with drought fears allayed, an end-of-September revival is more likely. Others differ. "The market's pessimism is justified," says an analyst. "There's no trigger to put the market on a high growth trajectory. Recovery is hinged on high growth and faster disinvestment. There are doubts about both." The MNC fund chief agrees: "The only positive factors were privatisation and reforms. But the pace of reforms has been slow and privatisation, after a great show, has hit a roadblock."
When will the FIIs and retail investors return? Experts feel they'll come back only when interest rates get attractive. Jagnani feels small investors would come in only when there's a sustained rally of at least 200-300 points. At the moment, everyone is keeping fingers crossed on the cyclical run of the market that takes the Sensex to a comfortable 4000-4500 every two years.