According to a majority of respondents in a survey conducted by FICCI, the BSE barometer's new achievement is likely despite the overall business confidence dipping to a five-year low and GDP growth slowing down to 8.9 per cent in the second quarter of this fiscal from 10.2 per cent in same period last year.
The Sensex has been fluctuating, of late, on account of various reasons such as rupee appreciation, turmoil over Participatory Notes, US Federal Reserve rate cuts, increasing crude oil prices and sub-prime crisis. But the market sentiments have not been dampened by these factors, the survey 'Indian Capital Markets Ahead of Curve' said.
The mood of the market players is overtly optimistic, with 58 per cent respondents believing that the market in one year would achieve 20,000-23,000 levels and another 23 per cent feel that it would move beyond 23,000.
While, 55 per cent of the respondents predict the market level to reach 25,000 and above at the end of two years, about 26 per cent feel that Sensex would remain between 23,000-25,000.
A majority of respondents has identified banking and engineering as well-performing sectors, while IT, pharma and auto are the few sectors that are likely to under-perform, FICCI said.
With bank credit becoming more expensive and external commercial borrowings (ECBs) tighter, the capital market is the only other option for raising funds, the report said.